From bursting the real estate bubble, skyrocketing income gap, the stock market plunge, AND massive student loan debt...generation X has had a lot of economic hurdles to overcome.
Once your child begins working and earning income, setting up a Roth IRA can be both an excellent way to teach your child about money management and a tax-effective means of growing a fund for the child’s future needs.
If you own a small business, chances are that it is tying up the majority of your wealth at the expense of your personal financial security. That is what a recent survey by CNBC and the Financial Planning Association (FPA) found. The poll sampled 178 financial advisors across the U.S. who provide services to small business clients aged 35-70 and found that on average, 70% of small business owners’ wealth is invested in their companies. Many of the advisors expressed that this creates a high degree of financial risk for these business owners and their families.
If you are new to investing, an index mutual fund is a logical place to begin. Index funds have comparatively low costs and carry less risk than actively managed funds. They obviate the need to pick outperforming stocks since the fund’s purpose is simply to mirror its index through diverse investments. Index funds also make it easy to maintain the asset allocation that is most appropriate for your needs. Warren Buffet touted the virtues of the index fund in his 2014 letter to shareholders: “The goal of the non-professional should not be to pick winners – neither he nor his "helpers" can do that – but should rather be to own a cross-section of businesses that in the aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal.”
Deciding to open an IRA is an important step in your retirement planning. Before you are ready to deposit funds, however, you have some additional decisions to make:
1. Which type of IRA will you open?
2. How much will you invest?
3. How will you invest?
4. What type of IRA provider will you choose?
Annuities have seen a rise in sales in recent years. While some financial advisors endorse them heartily, others are cautious, if not outright hostile toward this entire class of investments. The appeal of annuities is the guaranteed income stream they promise. Many investors are more hesitant to invest in equities in the shadow of market volatility that unsettled and even decimated many Americans’ retirement plans in too-recent history. Guaranteed long-term income, even at modest rates of return, can be incredibly appealing.
Your home is likely to be the largest purchase you make during your lifetime. As such, it requires careful financial planning. Your choice of mortgage will likely impact your finances for many years to come. Fully understanding your options and the variables involved is part of sound financial planning for your family.
If you are thinking about starting a business or wondering how you can make the one you already own run more effectively, consulting a financial professional can deliver valuable benefits. A lot of details go into making a business run smoothly, and few business owners have the specific knowledge and experience necessary to properly attend to all of them. By consulting outside experts about questions such as business structure, taxes, and payroll, you can save yourself time, stress, and the consequences that flow from missteps.
Although it is a cornerstone of any sound financial plan, insurance is an often undervalued aspect of financial planning. There are many reasons people fail to carry sufficient insurance. Choosing plans can be confusing, and consumers often misunderstand what types and levels of coverage their policies actually provide. There is also the natural tendency to not want to think about death, disability, and serious illness. Pretending risk does not exist, however, simply amplifies the consequences of unexpected events, allowing them to wreak unnecessary havoc on the finances. Health, life, disability, and long-term care insurance are tools available to protect your financial plan from the unexpected.
“Always pay; for first and last you must pay your entire debt.” – Ralph Waldo Emerson
You might think, “That was easy for Emerson to say; he had a Harvard degree and a sizeable inheritance.” It’s true that staying out of debt is easier for some than for others. Many Americans struggle every month to find enough money to meet current expenses as well as battle their existing debt. If you have been trying to get out from under the burden of debt and are frustrated by your lack of progress, don’t despair. There are some simple steps you can take to make this seemingly insurmountable task more manageable.