Our stock market is unsteady and the latest turn in the financial markets has summon some rather nasty thoughts, back to the days of a miserable and gloomy economy.
At this very moment the financial market is pretty vague and if you are banking on the stock prices changing you could end up in desperate tears over the losses, let alone any of the gains you have gathered in your portfolio, over the years.
The summarize here are 8 points you should consider to hedge your familys finances, their future, and please do not rely solely on your 401K to help you through a hard time:
1. You should try and save at least 30-35% of your income into interest bearing accounts akin to a savings account or credit union CD's. Heres the reason for my madness, you can get a rapid return over a shorter period at a elevated interest rate, without taking any more risk. When they the CDs matures or expired their interest bearding duration, simply move the money you have gathered into similar extremely high interest bearing CD and you want to invest the original amount as well as the interest you have earned. The goal is to grow the CD to a rather good size allowing you to divide the CD into 2 single portfolios and reinvesting the funds again. This will all you grow your funds rapidly due to the 8th wonder of the world, i.e. the power of compounding interest. The key is to grow your funds without exposing yourself to any more risk than you have to. Once you have grew your CDs you will have the ability to divert the CDs into the stock market when the time is right.
2. Move a portion of your 401K into an Roth IRA " the point is not to take all your money but rather just a portion of your employer sponsored 401K plan especially if your employer has a matching contribution to your 401K. This is free money for you to grow your 401K.
3. One of the safest investing vehicles in the market place are bonds...your money is much more safer when you invest in bonds rather than stocks. and you don't have to worry about a depleting stock market.
4. One of the worse mistakes is having a substantial amount of debts before you retire. There is no worse feeling than realizing you at your retirement age, and now you have to hunt for another job just to be able to payoff your debt. There you are standing next to some kid young enough to be your grandchild and having to call him/her boss. That is not a anyones idea of a good retirement.
5. Have the ability to become mortgage free while at an early age. Use the latest mortgage acceleration strategies available to you and become debt free faster so that you can pay off your mortgage 15 years faster without changing your lifestyle or paying extra towards your mortgage.
6. By creating an emergency reserve in a separate financial company or bank, which is not linked to your current bank account, will allow you to avoid little withdrawals that will eat up your emergency funds.
7. One of the biggest mistakes home owners make is having their house insured at replacement value, not the market value of their home and the make the similar mistake when choosing the type of coverage for their cars. When you reside in a better neighbor or more expensive neighborhood, you do not want to insure your car at a state minimum value. A good way to reduce your insurance costs is to invest in a umbrella coverage, which will include your home, car...
8. Getting sick or injuring, yourself could deplete your savings or 401K if you do not have proper Health insurance. Just to elaborate, imagine slipping in the bathroom or injuring your knees. Therefore, you know that you could pay in the region of $6,000 just for the surgery and well over for doctors visits. Which is ridiculous.
The goal is to begin working on one item at time so that you do not get overwhelmed. The key is to set a timeframe and ensure you are able to complete each goal to protect your retirement income and your family in retirement.
At this very moment the financial market is pretty vague and if you are banking on the stock prices changing you could end up in desperate tears over the losses, let alone any of the gains you have gathered in your portfolio, over the years.
The summarize here are 8 points you should consider to hedge your familys finances, their future, and please do not rely solely on your 401K to help you through a hard time:
1. You should try and save at least 30-35% of your income into interest bearing accounts akin to a savings account or credit union CD's. Heres the reason for my madness, you can get a rapid return over a shorter period at a elevated interest rate, without taking any more risk. When they the CDs matures or expired their interest bearding duration, simply move the money you have gathered into similar extremely high interest bearing CD and you want to invest the original amount as well as the interest you have earned. The goal is to grow the CD to a rather good size allowing you to divide the CD into 2 single portfolios and reinvesting the funds again. This will all you grow your funds rapidly due to the 8th wonder of the world, i.e. the power of compounding interest. The key is to grow your funds without exposing yourself to any more risk than you have to. Once you have grew your CDs you will have the ability to divert the CDs into the stock market when the time is right.
2. Move a portion of your 401K into an Roth IRA " the point is not to take all your money but rather just a portion of your employer sponsored 401K plan especially if your employer has a matching contribution to your 401K. This is free money for you to grow your 401K.
3. One of the safest investing vehicles in the market place are bonds...your money is much more safer when you invest in bonds rather than stocks. and you don't have to worry about a depleting stock market.
4. One of the worse mistakes is having a substantial amount of debts before you retire. There is no worse feeling than realizing you at your retirement age, and now you have to hunt for another job just to be able to payoff your debt. There you are standing next to some kid young enough to be your grandchild and having to call him/her boss. That is not a anyones idea of a good retirement.
5. Have the ability to become mortgage free while at an early age. Use the latest mortgage acceleration strategies available to you and become debt free faster so that you can pay off your mortgage 15 years faster without changing your lifestyle or paying extra towards your mortgage.
6. By creating an emergency reserve in a separate financial company or bank, which is not linked to your current bank account, will allow you to avoid little withdrawals that will eat up your emergency funds.
7. One of the biggest mistakes home owners make is having their house insured at replacement value, not the market value of their home and the make the similar mistake when choosing the type of coverage for their cars. When you reside in a better neighbor or more expensive neighborhood, you do not want to insure your car at a state minimum value. A good way to reduce your insurance costs is to invest in a umbrella coverage, which will include your home, car...
8. Getting sick or injuring, yourself could deplete your savings or 401K if you do not have proper Health insurance. Just to elaborate, imagine slipping in the bathroom or injuring your knees. Therefore, you know that you could pay in the region of $6,000 just for the surgery and well over for doctors visits. Which is ridiculous.
The goal is to begin working on one item at time so that you do not get overwhelmed. The key is to set a timeframe and ensure you are able to complete each goal to protect your retirement income and your family in retirement.
About the Author:
To determine how you can become debt free today and slash your mortgage without scarifying your lifestyle, please go to the Mortgage Acceleration Calculators . You can retire within your original planned schedule and live a debt free without sacrificing your lifestyle.
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