Financial Secrets For Gen X & Y|Reach Retirement With More Money & Little Effort
When you are in your 20’s and 30’s you have your entire career ahead of you. Do yourself a favor, while you are developing that career, remember to also develop your retirement knowledge. (Hot tip: the best time to plan your exit from the work force (your retirement) is when you first make your entrance).
Got An Exit Plan?
Your exit plan will not be emphasized in college classes and you won’t hear it from the human resource department where you work; you will have to figure it out on your own. (Hot tip: you only get so many years to save up for your retirement; unless you plan on working forever).
Make It Simple
Help yourself make investing simple, find extra money to invest by trimming your expenses and avoiding debt during your working years. You also help yourself by learning as much as you can about finance, retirement and investments.
Never ignore your retirement plans; make your retirement planning a priority. Learn some financial tricks that will help your investments grow with less effort on your part.
The 5 Steps To Great Retirement With Least Effort
Step #1) Take Full Advantage of Compounding
Your Silver Bullet
Looking for a silver bullet, compounding interest is it.
Due to the magic of compounding interest, if you start investing in your 20’s, your money will grow with less effort on your part than if you start investing in your 30’s or 40’s.
With compounding interest, your money grows faster because it earns interest on the interest on the interest and so on. You will have to invest less money in your 20’s to get the same results as someone who starts investing in their 30’s.
A good compounding interest calculator will show you the difference.
2) Invest In What You Know
Invest In Your Interests
Avoid investing in what you do not know anything about. For example if you are not familiar with computer technology do not invest in mutual funds or stocks that invest in computer technical companies.
You are better off investing in products that you use and are familiar with them. If you love McDonald’s french fries, invest in McDonald’s. If you drink Coke not Pepsi, invest in Coke.
3) Dump Losers
Do not fall in love with your investments. If you bought your favorite stock and it has lost half of its value, understand that it may never regain its original value, be okay with that and sell it…it’s okay.
4) Skip The Tips
Do not follow financial tips, avoid water-cooler chatter, don’t follow the crowd. If you follow the guy at the office with the hot stock tip you are assuming that he/she knows more about investing than you do. Don’t follow blindly, you may actually know more than others. Do your own homework on an investment before putting money into it. You will save yourself a lot of grief.
5) Watch Fees
Fees Are Up, Growth Is Down
Be aware of the fees you pay, more fees means lower investment growth.
The fees you pay in a 401k plan are not as noticeable as fees in an IRA or savings account. All fees should be explained on your retirement plan statements, if not be sure to ask your human resource department for a detailed breakdown.
Load or No Load
With mutual funds, you have many options, do not feel forced to buy a load fund. There are many no load mutual funds available today for IRA’s and 401k retirement plans.
A no load will not charge you a fee to open or close the investment. A load fund charges fees at the beginning and/or ending of the investment period. Know what you are investing in; be sure to ask up front which type of mutual fund you are buying.
Also be aware of brokerage fees; brokers earn their living on the fees you are charged. Online brokerage fees can often times be less; this is because when you trade online you do not get a live broker to talk to.
Learn how to reach retirement with more money and less stress. Skip the tips, use your silver bullet, watch the fees. If you want a dream retirement someday you will need the money; your dream retirement planning all starts now.