| |
| |
|
Investing Information |
|
|
|
Five Sure Fire Way to Secure Your Financial Future
"You can be poor when you're young, but you can't be poor when you're old." That was the tag line used some years ago in a financial services television commercial. Truer words were never spoken. I was relatively poor when I was young. Just about everybody I knew was and it was kind of fun. We lived an almost communal lifestyle, sharing money, accommodation, food, beer, cigarettes and other essentials of post-pubescent life. Would it be as much fun if I had to do it again today? Could I do it again? Not on your life! Now I'm anything but a financial genius but there are five basic principles that I've learned and used to secure our financial future. And while far from wealthy, I have every confidence that I will not have to live in a refrigerator box whenever I quit working and that my wife will be able to comfortably carry on in the event of my premature demise. (You should know I'm at an age where I think eighty-five is a premature death!) Is building a secure financial future akin to rocket surgery? Absolutely not- you need to do five key things to get started: 1. Determine your short and long-term financial goals. Start by taking a comprehensive snapshot of your current situation-your assets, net income, debts and living expenses. Once you've done this you can start setting long and short-term financial goals. Decide what lifestyle you want to enjoy between now and when you retire; what retirement lifestyle do you expect to have and what sort of education do you expect to provide for your children. 2. After you've assessed where you are now and where you want to be in the future take steps to protect your ability to get there--and stay there once you've arrived. A major part of your family's financial program is to insure against major financial loss. There are simply no guarantees against serious illness, accidents or untimely death. So take the steps necessary to insure against loss of life, loss of income and loss of physical assets. 3. Pay yourself first. Save at least 10% of pre-tax income - more if possible. Pay down your mortgage as quickly as possible, especially in times of low interest. In the short term, you'll be better off reducing a mortgage that costs you 6% than earning around a taxable 1.5% (or less) in a savings account. Maximize your RSP/401K contribution every year and make the contribution at the beginning rather than at the end of the year. Simply doing that will substantially increase the size of your retirement nest egg when you're ready to cash out. 4. Avoid credit traps. If you use credit cards, always pay any money owing before interest is due. Consider paying off your credit card immediately if you have money in a savings account-as with the mortgage, the interest earned on the savings is certain to be lower than what's charged by the credit card company. Avoid using credit cards for cash advances. Usually the interest charges are higher for these and the charges begin immediately. If you do carry a balance on your cards try to negotiate a lower rate with the credit card company. If you need money urgently, it's usually cheaper to negotiate a personal loan with your bank or credit union. 5. Finally, protect your family in the event of your death. Make a Will. If you die without leaving a Will in all likelihood the only thing you'll really leave your loved ones is a bloody mess-one that could take many years and a whole bunch of money to sort out. Without a Will, the court/government will decide how your property and possessions will be divided. I would expect there are two chances of them acting in a way consistent with what your wishes might have been-slim and none! Making a Will doesn't mean the Grim Reaper is about to pay you a visit. It simply means that your affairs will be sorted out in the ways you want and, as a result, you can go about your life with a peaceful mind because your loved ones are protected. These five principles are only a starting point-a few suggestions that any financial management professional can improve and expand on. If I have one regret about how I've handled my financial affairs over time it is not enlisting enough professional help. When we were starting, the financial management business was neither as big nor as sophisticated as it is today. Who knows, with better help, I might be writing this from some warm Caribbean tax haven rather a cold Calgary office! "Don't try this alone-use a trained professional," is absolutely the best advice I'm really qualified to give. About The Author © Dr. Tom Olson 2004, All Rights Reserved. Permission to reprint article granted as long as this signature remains intact. Dr. Tom Olson is the author of Don't Die With Your helmet On. Visit www.Dontdiewithyourhelmeton.com for more information about Dr. Tom, the book and his work. info@dontdiewithyourhelmeton.com
MORE RESOURCES:
Investing - Google News |
|
|
|
RELATED ARTICLES
Investing and Understanding What You Buy "There is nothing more frightful than ignorance in action!" Johann Wolfgang von Goethe (1749 - 1832)I don't really know how cars actually work. Not really! I know how to drive them, but if you asked me how they work, I would not really know how to definitely explain it. Making Every Penny Count More and more workers are leaving their jobs and taking their 401 k retirement plan funds with them. While some are rolling their funds over into IRAs or other qualified plans; many are taking their distributions in cash. Effective Advice For A New Generation of Investors CATCHING A FALLING KNIFEOne of the most common mistakes made by inexperienced investors is trying to "catch a falling knife". This is a habit, common among new investors, of buying stocks that are in "freefall", and it's a bad idea for an investment strategy. Copy Cat or How to Use a Successful Trading System How many books have you read about successful traders? How they did this or that and made a fortune and are still doing it. You say to yourself, "I'm going to follow his method and get rich". Powerful Hidden Techniques Mystery Formula - The Covered Call Option Trading Buy-Write Strategy For better or worse, most option trading investors purchase stocks with the intent of holding their shares for an extended period of time.We do this mainly because the media and industry professionals have drilled into our heads, year after year, time after time, that it’s best to buy and hold. The Dreaded Direct Question (Please have a glass of water within reach before reading this article.)Your personal financial planning is the topic of discussion here today, but not quite yet. Shareholders Meeting Changing With Times A significant number of corporations that settled accounts in the past year are ready to hold their annual shareholders meetings.In this year's meetings, more than 300 companies plan as their main focus of attention defense measures against hostile takeover bids. Wit and Wisdom on Money, Wall Street and Success - Part #4 Can you concisely summarize your investment philosophy in a few sentences? My experience is that most people can't. The quotes that follow are diamonds that offer a real powerful education in the world of Risk Management. Easily Finding A Good Stock There is a tremendous amount of software, complicated high priced newsletters, radio and TV stock pickers and Internet web sites that will help you find a stock that is going to make you rich.The problem is you don't know if this is talk or are these gurus putting their own money where their mouth is. Part II of Day Traders and Swing Traders and Options? Maybe! Before every protective put trade it is possible to calculate your anticipated maximum loss. Use the formula: (stock price minus strike price) plus option price. Choosing A Financial Advisor With so many financial advisors trying to woo you with their qualifications and experience, how do find one you can trust your finances with? 'Trust' is the keyword here, as you will depend on him/her for your future financial security. A good financial advisor can help you determine which investments are best suited for you, based on your financial goals. Your Worst Enemy To Successful Investing - The Media How do you make your investment decisions and where do you get your information? If you're like most of the people I know, you look to the experts.That's fine, however it's important to be aware that for every expert, there's an opinion and for every opinion there's an expert. The Benefits of Laddering Your CD Investments If you've decided to stock some money away in a certificate of deposit, why not reap the highest benefit over time by laddering your CD investments? What's a CD latter? I'm glad you asked.A CD ladder is made up by purchasing several CD's at one time with different maturity dates. How to Terror-Proof Your Money "To drift is to be in hell, to be in heaven is to steer." -George Bernard ShawFormer Homeland Security Director, Tom Ridge, has said it's not a matter of "if" we'll have another terrorist attack, but when. Investment Rowing You have rowed a boat at some time haven't you? Yes, put the oars in the water and pull. Of course, you don't know where you are going because you are sitting backwards. June 2005: Weather Forecasts for Weather Traders If Johannes Kepler, the renowned 17th century astronomer and discoverer of the planetary laws of motion, could speak from the heavenlies, he might have a few words of wisdom to share with the National Weather Service. Although Kepler's name is not normally associated with meteorology, he was quite the weather forecaster in his day. Going Against the Conventional Investment Wisdom First of all, I want to give everyone the disclaimer that I am not a registered financial advisor and I don't play one on TV. Therefore, I cannot legally provide financial advice and I will not do so. Retirement - Its Sooner Than You Think!! (Honestly) Many people hear "retirement" and think- what? 401K? Roth vs. Traditional IRA? Stocks, bonds, mutual funds? Do they?Or do many people put money away according to the suggested amount and then simply hope that when retirement comes all will work out?One report I read estimated that 66 million Americans have put away a Whopping $0 towards retirement. IF - The Wonders of Investing If it seems as if all investors are selling, who is buying? If trading has become entertainment for you, it may be time to refocus on profits. If your stock has reached an annual low, can it go any lower? If your stock has reached an annual high, can it go any higher? If all the television analysts jumped off a bridge, would anyone care? If your portfolio is based solely on fundamental analysis, perhaps it is time to learn technical analysis. Find Your Investing Soulmate on the Jersey Turnpike As a followup to a previous column, "Irreconcilable Differences," I received an e-mail from a reader asking how she could ensure, ahead of time, investment compatibility with a future spouse.Unfortunately, like most issues in life, the direct approach does not work.
|
| home | site map |
| © 2006 |
