After years of saving and investing in money-market accounts, you may have noticed that your balance is just not growing like you wish it would. Experts advise that you look at investing in stocks and bonds. Recent years have offered enticing performance, up to five times what you earn on savings,
but not guaranteed.
So, how do you take the plunge, when your every dollar is important, and you cannot afford to risk what you have to grow?
One answer might be a stock mutual fund. It’s a form of saving in which your money will be pooled with others, and a professional manager will purchase a diversified portfolio of stocks. Each investor owns a share of the whole fund, so you get diversification you couldn’t buy with your own small investment capital.
Because the fund is managed by a professional, you should benefit from constant attention. Trading of stocks in the account is done so as to minimize the impact of commissions and other trading costs
Showing posts with label financial goal setting. Show all posts
Showing posts with label financial goal setting. Show all posts
Thursday, August 6, 2009
Thursday, July 30, 2009
8 Ways to Stretch the Almighty Dollar
1) Cut your car insurance by increasing your deductible.
2) Check into dropping your mortgage insurance if your balance is low enough.
3) If you’re salaried, take your next raise and direct it to an RRSP or other retirement plan.
4) Save for college by having kids earn on their savings,or open a Trust Fund account in their name at your local bank.
5) Spend twenty minutes per week staying up on your financial options.
6) Invest some of your cash in stocks, bonds, or stock mutual funds.
7) If you don’t need it, don’t buy it. If you can’t pay for it, then don’t buy it, and if you don’t understand it, don’t buy it.
8) Analyze your health care plan. You may be driving a Cadillac when a Chevrolet will do.
2) Check into dropping your mortgage insurance if your balance is low enough.
3) If you’re salaried, take your next raise and direct it to an RRSP or other retirement plan.
4) Save for college by having kids earn on their savings,or open a Trust Fund account in their name at your local bank.
5) Spend twenty minutes per week staying up on your financial options.
6) Invest some of your cash in stocks, bonds, or stock mutual funds.
7) If you don’t need it, don’t buy it. If you can’t pay for it, then don’t buy it, and if you don’t understand it, don’t buy it.
8) Analyze your health care plan. You may be driving a Cadillac when a Chevrolet will do.
Thursday, July 23, 2009
Selecting a Mutual Fund
Start by selecting a fund that feels right. Money magazine and other financial publications offer dozens of funds, analyzed by performance. You can call the fund directly using their toll free number, or you may wish to talk with a stock broker to get her input.
Funds are available with ‘load’ or ‘no load’ options. The ‘load’ funds have a commission of say 5% paid out of your initial deposit. The alternative is to choose ‘no load’ funds. These funds have to pay the brokers, and it is reflected in overall performance. However, most studies comparing the two find little difference in overall performance.
Different funds have different objectives. Some seek growth with a higher degree of risk and little current income. Others will seek dividend income now, but with less risk. Which is best for you? It depends on your overall objective. Do be sure to look at a minimum of five years past performance though. You are interested in long term.
Funds are available with ‘load’ or ‘no load’ options. The ‘load’ funds have a commission of say 5% paid out of your initial deposit. The alternative is to choose ‘no load’ funds. These funds have to pay the brokers, and it is reflected in overall performance. However, most studies comparing the two find little difference in overall performance.
Different funds have different objectives. Some seek growth with a higher degree of risk and little current income. Others will seek dividend income now, but with less risk. Which is best for you? It depends on your overall objective. Do be sure to look at a minimum of five years past performance though. You are interested in long term.
Thursday, July 16, 2009
Goal Setting for Every Type of Family
· Establish an emergency fund of cash that is equal to 3-6 months of pay.
· Start saving for college. Any little bit helps. At 7% interest, money doubles every ten years. So by starting when kids are young, you can make one dollar at their birth worth $2 at age 7, $4 at age 14, and $8 at age 21.
· Buy term life insurance for at least twice your mortgage amount. More is better, especially if you have more than one child. A $200,000 policy for a 35 year old male costs about $200 a year. Your objective is to be sure that the mortgage would be paid, that living expenses would be available for a period of transition, and there would be a downpayment made on the children’s education. Some planners suggest much more insurance, knowing that in a one income family the other parent would need time to train, seek a job, etc.
· As your children get to age 14 and beyond, you may wish to encourage after - school employment. Not just for the character building potential, but because they can earn thousands of dollars without paying federal income tax. (see your accountant)
Single / Single Parent
· Set aside three months take home pay for your emergency fund. If you are a single parent you’ll want to strive for six months on hand.
· As you accumulate savings, look for mutual funds or other alternatives to provide a higher return than money market accounts, with measured risk. If you are a single parent, decide when to start saving for college. As little as fifty dollars per month in a savings account can make a big difference. Ask your banker.
· Protect your credit rating. Perfect credit will be helpful in moving, refinancing, or even obtaining a credit line or home improvement loan, when needed. If you have recently divorced you will want to open accounts in your own name with credit cards, department stores, and credit unions.
· Check your homeowner’s insurance to be sure you have sufficient coverage to replace your belongings. “Replacement cost” coverage is preferred.
· Collect child support if you’re entitled to it. For information on your right to child support contact BC Child Support Info Line at 1-888-216-2211 or go to wwwhsd.gov.bc.ca.
Two Income Families
Buy a home or a second home, if appropriate. The wealth created though long term ownership of real estate is unmatched. The tax deductible nature of your real estate payments make for another bonus.
Use and maximize your RRSP’s, or other retirement options. As much as retirement seems far off in the future, it is coming. Anything you can do now can make a big difference in 20 to 30 years.
Empty Nesters
Maximize your savings for retirement
Consider reducing your life insurance if your mortgage is paid off.
Triple check your long-term health care insurance options while you’re still healthy.
Check your Canadian Pension Plan and/or Old Age Security benefits by filling out the proper forms. Call 1-800-277-9914 to get the form.
· Start saving for college. Any little bit helps. At 7% interest, money doubles every ten years. So by starting when kids are young, you can make one dollar at their birth worth $2 at age 7, $4 at age 14, and $8 at age 21.
· Buy term life insurance for at least twice your mortgage amount. More is better, especially if you have more than one child. A $200,000 policy for a 35 year old male costs about $200 a year. Your objective is to be sure that the mortgage would be paid, that living expenses would be available for a period of transition, and there would be a downpayment made on the children’s education. Some planners suggest much more insurance, knowing that in a one income family the other parent would need time to train, seek a job, etc.
· As your children get to age 14 and beyond, you may wish to encourage after - school employment. Not just for the character building potential, but because they can earn thousands of dollars without paying federal income tax. (see your accountant)
Single / Single Parent
· Set aside three months take home pay for your emergency fund. If you are a single parent you’ll want to strive for six months on hand.
· As you accumulate savings, look for mutual funds or other alternatives to provide a higher return than money market accounts, with measured risk. If you are a single parent, decide when to start saving for college. As little as fifty dollars per month in a savings account can make a big difference. Ask your banker.
· Protect your credit rating. Perfect credit will be helpful in moving, refinancing, or even obtaining a credit line or home improvement loan, when needed. If you have recently divorced you will want to open accounts in your own name with credit cards, department stores, and credit unions.
· Check your homeowner’s insurance to be sure you have sufficient coverage to replace your belongings. “Replacement cost” coverage is preferred.
· Collect child support if you’re entitled to it. For information on your right to child support contact BC Child Support Info Line at 1-888-216-2211 or go to wwwhsd.gov.bc.ca.
Two Income Families
Buy a home or a second home, if appropriate. The wealth created though long term ownership of real estate is unmatched. The tax deductible nature of your real estate payments make for another bonus.
Use and maximize your RRSP’s, or other retirement options. As much as retirement seems far off in the future, it is coming. Anything you can do now can make a big difference in 20 to 30 years.
Empty Nesters
Maximize your savings for retirement
Consider reducing your life insurance if your mortgage is paid off.
Triple check your long-term health care insurance options while you’re still healthy.
Check your Canadian Pension Plan and/or Old Age Security benefits by filling out the proper forms. Call 1-800-277-9914 to get the form.
Wednesday, July 1, 2009
Sell Your Home or Become a Landlord
Renting your home out may seem like a great alternative to selling at a lower price than expected, but make sure you consider the financial implications.
If the main idea in renting the house is to move now and sell later, be sure to factor in the costs which may occur when reconditioning the rental home for sale as a residence. Chances are the aggravation of converting your home to a rental will exceed any contribution to costs or profits.
Most importantly, keep in mind that being a landlord can be difficult. Tenants will demand that repairs and home maintenance be kept up with in a timely manner. Expenses can be quite substantial, so be prepared with funds to cover them. Feel free to ask me for more information on sales or rental, anytime!
If the main idea in renting the house is to move now and sell later, be sure to factor in the costs which may occur when reconditioning the rental home for sale as a residence. Chances are the aggravation of converting your home to a rental will exceed any contribution to costs or profits.
Most importantly, keep in mind that being a landlord can be difficult. Tenants will demand that repairs and home maintenance be kept up with in a timely manner. Expenses can be quite substantial, so be prepared with funds to cover them. Feel free to ask me for more information on sales or rental, anytime!
Subscribe to:
Posts (Atom)
