Most people think that when it comes to investing you have to be wealthy to put money to work. In reality that's not the case all you really need is a manageable income( sustained surplus in your budget) or good credit(ability to finances your investment growth) . A good majority of people tend to screw their credit ratings as teens or in their early twenties. Why? For the simple fact lack of interest in money management. Considering the fact that it ordinarily could take seven to ten years to recoup a good credit score that puts an individual in their late thirties or early forties before they realize they're going to need something to retire on besides social security. Now one has to sit down and figure out how much it's going to cost them to live comfortably twenty or thirty years from now. This is where financial planning come's in hand. Here are some things to consider when financial planning.
Every ten years cost of living can nearly double on us. Let's take a simple loaf of bread ten years ago you would pay on average $1.75 with taxes now today it'll cost around $3.50. When planning financial future consider how you want to live, do you want to work till you drop or, do you want to live comfortably in your golden years.
2. You standard of living
A huge percentage of Americans end up drastically reducing their living standards simply cause of improper financial planning and lack of putting a proper savings plan into affect. Remember always when your working to pay yourself first otherwise you are just working for the liabilities. Consider a minimum of 15% of your monthly net income. If you have difficulty saving money for retirement or other future financial plans consider a Roth IRA or a 401k with your employer.
None of us know when a bad situation could fall upon us. The last thing you want to consider doing is maxing out your credit cards or savings which is why I would recommend keeping a balance amount in your savings an and checking, at least 30% in checking and 70% in savings.
Something to consider when investing for future
Even though a traditional savings account might be more of a stable place to build cash with a very modest interest rate there are other ways to grow your money much quicker such as stocks and bonds. However we'll discuss that in the investing section. When investing in stocks and bonds there are direct and indirect ways to do so.
Keep in mind that before you began to invest money in any investments began by aggressively paying down debt to a manageable level that you are able to sustain. The less debt you have the more free cash flow you are able to put to work. For some really good ways of managing debt and saving money here are some site that provide step by step tools for managing debt and saving money
I've been researching investments particularly stocks, bonds, and commodities as well as market trends for nearly ten years now. I've contained a fully invested portfolio for over five years and seen eight out of ten of my holdings return 88% since the great recession and financial crisis of 2008. I was once like a lot of people very cautious of the risk of entering the markets until I realize the difference between my annual interest statement on my savings account, which was a mere 0.001% compounded monthly, verses an average over all return of 10% including quarterly dividend payments on my annual portfolio statement. However I'd suggest diversifying your money when invested and hedge as well to sustain profit gains. This can easily be done with a self managed portfolio platform with very minimum cost to you. Typically professional experiences advisors and planners will suggest keep a balance portfolio of stocks and bonds to hedge gains in up and down markets. I found this strategy to be very beneficial in recession periods it helps limits any losses that may occur.
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