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planning and stop worrying! In a recent Gallup poll, 60% of those surveyed
said they worried about their financial future.
There are a few simple steps you
can take to help reduce your worries:
 Put
aside some amount regularly in savings or other
investments. The compounding of earnings can be
substantial. The longer your investment period, the
greater the beneficial effect of compounding.
Invest
in what you know. The better informed you are,
the better your investment decisions will be. If you
don't want to learn about investments, consider hiring a
money manager and paying him or her to do your investing
for you.
Diversify
your investments. Have some of your money in an
investment that is easily converted to cash in case of
emergencies. The old adage "don't put all your eggs
in one basket" is good advice when it comes to your
investments.
Prepare
an annual balance sheet (a list of all your
assets minus all your debts) to determine your net worth.
A comparison of your annual balance sheets will reveal
your success at growing your retirement funds.
Plan
where you want to be financially by retirement age.
The calculators listed below will help you determine your
savings requirements. Once you know how much you need to
save, put your plan into action. Over 90% of Americans
must rely on the government or others for assistance
during retirement. With proper planning and diligence,
you can be among those who can retire in comfort.
Don't
use credit to purchase consumption items. Wait
until you can pay cash for things which decrease in
value. Borrowing money to purchase a home is usually a
sound idea. Using credit to purchase household
furnishings is not.
Pay
off your credit card balance every month. Your
credit card should be for the convenience of purchasing,
not a source of permanent finance. The interest rates are
much too high.
Monitor
your investments to maximize your after-tax return.
Use the calculator below to compare the long-term results
of different interest rates. The difference that a 2%
greater return can make in the growth of your investments
is dramatic.
Have
your insurance agent do at least an annual review of your
insurance needs to determine that you are
neither under- nor over-insured. Be sure to contact your
agent when you buy or sell any property.
The Magic of Compounding!
If you could have one of the following
as your pay for thirty days' work, which would you
choose? (A) $10,000, or (B) a penny the first day, two
cents the second day, four cents the third day, eight
cents the fourth day, and so on, with each day doubling
on out to thirty days.
The $10,000 sounds very attractive, but
the fact is that the penny doubled each day for thirty
days adds up to over five million dollars. Of course,
that is 100% interest compounded daily, a rate not
available to most of us working folk. Nevertheless, this
example shows you the power of compounding on your
investment earnings.
Here are some easy-to-use
calculators
Do you know how much you need to set
aside to fund a college education for your child?
How much must you save each month for
your retirement?
What will your Individual Retirement
Account (IRA) be worth when you get ready to start
drawing on it?
You can get rough answers to these and
other questions very quickly by using the following
calculators and making a few estimates on your part. If
we can be of help or answer questions for you, please
call us.
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