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Financial Planning
Start 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:
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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?
Education Funding CalculatorHow
much must you save each month for your retirement?
Retirement Calculator
What will your Individual Retirement Account (IRA) be worth when you get
ready to start drawing on it?
Retirement
- How much to save and how long will it last?
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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