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.
In a nutshell, here are eight things you should all ready be doing to protect your financial future and not just plan on the company 401K to get you through it:
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. Take some of your 401K and roll it into an Roth IRA - and do not take all of your money out of the company sponsored 401K plan especially if they have company matching funds as this is free money for you to reinvest later when your 401K reaches a favorable size.
3. Determine your level of risk and the return you are seeking, remember Bonds still remain one of the safest investment options. One of the critical errors we have seen folks make is not changing their portfolio to addressing their lifestyle, close to retirement.
4. Avoid having debt in retirement. There is nothing worse that working at your local hot dog stand just because you dont have enough money to pay your bills. What gets even worse in retirement, you end up working for a kid old enough to be your grandkid, and calling him boss so that you can keep your job. The point is eliminate your debts before you retire.
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. Ideally, you should be setting up an emergency reserve in a separate isolated account, away from your normal bank account or checking account. This will prevent you from depleting your emergency funds or your retirement income as it will be harder to continuously making withdrawals from your emergency savings.
7. When considering your insurance costs, a great idea is to have your home insured at the replacement value, not market value of the home. The same principle will apply for your car. You do not have want to have your car insured at the minimum state value when you reside in a better district or neighborhood. The idea is to have a better insurance coverage for your lifestyle and you may want to possibility of having umbrella coverage to reduce your insurance cost.
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.
In a nutshell, here are eight things you should all ready be doing to protect your financial future and not just plan on the company 401K to get you through it:
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. Take some of your 401K and roll it into an Roth IRA - and do not take all of your money out of the company sponsored 401K plan especially if they have company matching funds as this is free money for you to reinvest later when your 401K reaches a favorable size.
3. Determine your level of risk and the return you are seeking, remember Bonds still remain one of the safest investment options. One of the critical errors we have seen folks make is not changing their portfolio to addressing their lifestyle, close to retirement.
4. Avoid having debt in retirement. There is nothing worse that working at your local hot dog stand just because you dont have enough money to pay your bills. What gets even worse in retirement, you end up working for a kid old enough to be your grandkid, and calling him boss so that you can keep your job. The point is eliminate your debts before you retire.
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. Ideally, you should be setting up an emergency reserve in a separate isolated account, away from your normal bank account or checking account. This will prevent you from depleting your emergency funds or your retirement income as it will be harder to continuously making withdrawals from your emergency savings.
7. When considering your insurance costs, a great idea is to have your home insured at the replacement value, not market value of the home. The same principle will apply for your car. You do not have want to have your car insured at the minimum state value when you reside in a better district or neighborhood. The idea is to have a better insurance coverage for your lifestyle and you may want to possibility of having umbrella coverage to reduce your insurance cost.
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.
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To find how fast you can eliminate your mortgage debt and retire early, please go directly to the Mortgage Accelerator enter your info to gain access to the free mortgage pay off calculator. In 4 seconds it will reveal your savings designed for your lifestyle.
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