A brochure providing personal investing tips for seniors citizens.
It highlights key guidances that seniors should consider before investing, and provides few tips on how you can avoid common mistakes and unwise decisions.
Click on the picture on the left to open the brochure.
(It is in Abode PDF format.)
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Personal Investing Guidance Tips for Seniors
1. Don’t Buy What You Can’t Afford
We all want that designer sweater, leather handbag, or cute sports car, but most of us just can’t afford to make the purchases. There’s a simple solution to this dilemma. If you can’t afford it, don’t buy it. This is often the easiest point to understand, but it is one of the hardest to implement when all those goodies are staring you in the face and all your credit companies are telling you it’s OK.
2. If You Can’t Pay Cash, You Probably Can’t Afford It
In our credit crazy world, amassing debt no longer carries a social stigma. Everybody has a car payment, a house payment and credit card payments. Well, remember what your mother said about everybody jumping off of a bridge? Just because “everybody” is doing it, doesn’t make it a good idea.
Buying something you can’t afford now, especially when the economy is unsettled, can double the pain of paying later. For example, if you purchase a $450,000 home today and the market goes into a slump and devalues your home by $200,000, you will be paying the bank twice what the home has come to be worth. Just because it was easy to get the credit to buy that home, doesn’t mean it was the right time for you to buy in.
3. Paying Interest on Anything Makes Somebody Else Rich
When you pay interest on a purchase, you are overpaying for that item for the luxury of getting to use it now. The simple act of paying interest means that the price you are paying to make the purchase is greater than the sale price of the item. You are giving away even more of your hard-earned money in order to own that item than the manufacturer thought the item was worth.
For example, if you buy a car for $25,000 with a loan at 7% interest for five years, in the end, you will pay almost $30,000 for the car. Once you factor in depreciation, you’re left with a very cheap car that cost you thousands more than it should have.
4. If You Are in Debt, stop Spending Money
Sometimes, such as when purchasing a home, the cost of the item is so great that you simply cannot afford to pay cash. This should be the exception rather than the rule. When it cannot be avoided, you need to close your purse and stop spending.
Getting yourself further it debt doesn’t help your financial situation. Making a realistic budget in this case is the key to success. Once you know how much you’re actually spending on those daily trips to the grocery store and coffee shop, you’ll be able to find room to cut costs realistically.
5. Don’t Count on Somebody Else to Save You
In times of economic uncertainty, people often think the government will be able to help them, but unfortunately this is often the time when the government has the least amount of money and freedom to help its own citizens. In most cases, the government won’t save you, so you’ll have to save yourself.
When the economy is in a downturn, you can’t just look at what you are spending, you also need to look at where the money is coming from. Your employer is facing the same difficulties you are: trying to make bill payments, balancing the flow of capital, all while sales are slowing. Just like you, your employer will be looking to reduce its costs, which could be in the form of layoffs.
You could be in big trouble if you haven’t planned for this possibility. The plan here is to start saving now for that eventual rainy day, and prepare an emergency fund for yourself. If it is too late to start saving and you already need the money, many financial institutions will let you defer a payment or two if you prove you have a smart financial plan to eventually pull through.
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5 Tips for Surviving Tough Times
Investing is the practice of buying what would be considered an asset, or assets plural, to achieve a return on the initial monies spent. People go about investing in many different ways. Some of these include:
• Investment Reasoning
Once an investment is made, it will hopefully provide you with a profit, which is the purpose behind the process to begin with. But so much depends on the markets, whether it’s stocks and bonds or real estate.
If you were to buy stocks that rise and eventually triple or even quadruple your initial investment, you might want to consider selling them before they possibly fall, thereby achieving your goal of making a profit. You would decide then to either keep those monies or reinvest in another stock. It’s the same basic concept when investing in funds. The more valuable they become, the bigger profit you achieve. When bond interests mature, it can be very profitable for the investor and if successful, will provide revenue that is far above what the initial investment cost was.
Some people buy real estate. This can be a very lucrative depending on what one does with it. Purchasing dilapidated homes, putting money into fixing them up and then placing them back on the market at a much higher price can turn out to be a great investment and something you might start doing over and over again. But remember that most often, this type of investment entails a lot of time and a lot of money upfront.
Real estate can also be purchased as a means of profit if you were to become a landlord and rent out or lease the space within your building. Depending on the location of your property, you can make quite a pretty penny through this type of investment.
• Professional Guidance
If you’re interested in investing but don’t have any idea about how to get started, one thing you can do is contact a Financial Advisor. These individuals are highly-qualified in most every monetary area of business and personal financial planning and can guide you toward the most appropriate means for investing your money. And not only will a financial advisor offer you direction and advice about when, where and how to invest your money, but once you’ve determined your investments, they’ll handle all of the details for you.
Kind of similar to the manner in which a stock broker works, a financial advisor will keep abreast of your investments and the markets involved and make suggestions on buying and selling as they deem appropriate. They will keep you updated as to the status of your investments as well. You should feel comfortable with whichever advisor you hire and may actually want to do some research on several of them before making a final selection. After all, it’s your hard-earned money and you should feel completely secure putting it in the hands of someone else.
• The Risk Factor
Remember that with whichever area you ultimately decide to invest in - stocks, bond, real estate, business, what have you, there is always a risk factor. And losing money is of course, never an enjoyable incidence. However, being realistic and going into the process with the acknowledgement that here is no guarantee of a return, and also being aware that you may even actually incur a loss or two, will help you greatly when making your investment decisions and dealing with the ups and downs of this sometimes complicated and risky course of financial action. One last thing to always keep in mind is that it is highly-suggested, for logical reasons, that you never invest more than you can afford to lose.
• Individual Prerogative
The probability of experiencing a monetary loss depends greatly on the market you choose to invest in so be as informed as possible before making any concrete financial decisions. They say ‘knowledge is power’ and in this instance, it couldn’t be more true because investing can be a tricky situation as well as stressful and overwhelming depending on what you’ve put your money into, and especially if you’re not well-informed in that specific domain. So it it’s always best, when possible, to use what you already have should you decide to go it alone and invest based on your own personal preference.
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Investing 101
By BRETT ARENDS
You’ve eaten the hot dogs. You’ve watched the fireworks.
Now it’s time to declare another kind of independence — your own. If you’re like most Americans, you haven’t been free in a long, long time.
Instead you’re in chains. You’re manacled to dozens of monthly bills you can’t seem to escape.
Mortgage payments. Car payments. Credit-card payments. Cellphone, landline, cable TV. TiVo. You name it. Thousands of dollars.
Call them tribute. Or tithes.
Who’s really free here?
Our Founding Fathers probably would have thrown their cable boxes into Boston Harbor. But then, they ranked liberty ahead of the pursuit of happiness.
Take a look at the chart. Maybe it should become our new national symbol.
It shows how much more we owe than our parents did.
In 1976, around the time of the bicentennial, the average family of four owed about $56,000. That’s in today’s dollars, after accounting for inflation, and includes mortgage, credit cards, car loans and the like.
The figure now? Oh, about $185,000.
Gosh, it’s just amazing we have a credit crisis, isn’t it?
Of course it must be somebody else’s fault. Insert conspiracy theory here: [ ]
But instead of blaming other people for our problems, or looking to political candidates to solve them for us, maybe we could start by looking a little closer to home.
Do we really need the Super Duper Every Movie Ever Made cable package? All those meals out? The endless trips to the salon? The supersized caramel double iced latte with extra whipped cream every day on the way to work?
Really, how lazy we are. Could there be anything easier in the world to make at home than an iced coffee?
It isn’t just the big bills that are shackling us. It’s all the little ones. They add up. If we cut just one dollar a day from our budgets and saved the money instead, in thirty years we’d have…. about $26,000.
Yep. That’s assuming we earned about 5% after inflation on our investments - a reasonable assumption, but not a heroic one.
Twenty six thousand bucks.That’s in today’s money. If you’re not maxing contributions to your 401(k) plan, it’s even more because of the tax savings. Try $34,300.
That won’t buy complete freedom. But it can’t hurt.
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How to Declare Financial Independence
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