How you allocate the assets in your investment portfolio is the primary determiner of its return and volatility over time. All investments involve risk. The goal of asset allocation and diversification is to balance risk and potential gain across the portfolio. While aggressive investment in stocks exposes you to a greater risk of loss, investing too conservatively carries the risk of underperformance and failure to outpace inflation. Read on to learn about how you can appropriately allocate and diversify the assets in your portfolio to fit your savings goals.
The first step in shaping your investment strategy is to outline your goals. Are you saving for a new car, a home, your retirement, or your child’s college education? Perhaps you have multiple investment goals. It is more important than you may think to begin the investment process by clarifying your goals. How much money you want to have saved, in what time frame, and for what purpose can significantly influence what constitutes a sound investment plan for you.
When you begin to think about building a family, financial planning should be a prime consideration. According to the Brookings Institution, the average cost for a middle-income U.S. family to raise a child born in 2015 to age 17 is $310,605. While these numbers may seem staggering, there are several steps you can take to make them more manageable.
Putting a portion of your annual earnings into an Individual Retirement Account can carry a number of benefits. Boelman Shaw Tax & Financial Planning in Des Moines offers the following tips on making the most of your IRA contributions this year.
- How much should I contribute?
- How do I choose the right fund?
- Should I be reviewing my plan more (or less) often?
- Am I draining my retirement resources?
When anticipating becoming a new parent, you may never feel like you are fully prepared. The list of things to think about seems endless. While you are researching pediatricians, schools, and parenting advice, remember that appropriate financial planning is essential to providing your child with the best possible start in life. Sit down with a qualified financial planner to discuss how you can take full advantage of the benefits available to you and structure your finances to provide maximum security for your growing family. Be sure to address a few key issues while you are awaiting your new arrival.
With the soaring costs of higher education, many people struggle with the question of whether to borrow from their retirement accounts to help pay for their children’s college costs. Although we all want to help our children as much as possible, we have to take care of our future selves as well. Consider carefully before you decide to tap into your nest egg to help your child pay for college.
Divorce marks a major change in your life. This is especially true as it applies to your finances. As you make this tremendous shift, well-thought-out financial planning is crucial. Make sure you pay attention to these key areas so you can be as in control of your independent financial life as possible.
