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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 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. |
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 Calculator
How
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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