Invest The Smart Way
If you have been told that it takes lots of financial smarts to get ahead plus stay ahead financially, you have been misinformed. To get ahead of the financial 8-ball you simply need to follow some financial basics.
#1 – Max Out Your Investments Whenever You Can
You cannot afford to miss all opportunities to max out your 401k and Roth IRA accounts. This is especially important with your 401k account if your employer matches your contributions. Employer matches equal free money for you. The more money you invest into your retirement accounts the more money will be waiting for you when you retire.
Contributions to a 401k retirement plan are not tax deductible but at retirement when you make your withdrawals, your contributions are tax-free. Your earnings will be taxable but not your contributions.
#2 – Get A Financial Planner To Quarterback For You
Find yourself a good financial planner. What would that look like? A good planner is one who understands your personal investment goals, financial style, time horizons and risk tolerance levels. Judge your financial planner like you do your doctor; make sure they understand you and what you want.
The purpose of your financial planner is not to sell you financial products; their purpose is to help you with your investments.
#3 – Fall In Love Somewhere Else
Never fall in love with your investments; if you do, the tendency is to hold onto them too long, even when they turn into losers. If your investments goes bad, that’s okay, get out of it. Avoid making a bad investment decision worse by staying with it too long.
#4 – Ignore Hot Tips
Hot tips are dangerous, but so easy to be lured into. Just remember that by the time a hot tip reaches you their trail has turned cold. Last months hottie could be this months loser, so be aware.
#5 – Some Things Just Cannot Be Ignored
You can ignore watering the plants in your cubicle but do not ignore your investments. The market is in a constant state of change,if you ignore your investments during these changes you could be missing opportunities to buy and sell.
Investments need to be religiously monitored for fee changes, investment model changes by the fund management team or allocation models could be changed. If you ignore your investments you risk ending up with a portfolio that does not coincide with your investments goals any more.