Before you can create a robust investment portfolio, there are numerous factors you should consider, which include everything from the types of investments you'll make to the level of risk tolerance you have. Some investors have a high risk tolerance, which means that they're willing to make risky investments despite the ample risk of substantial portfolio losses. There are also many investors who adopt a strategy that relies on low risk tolerance. Understanding your own risk tolerance is crucial for long-term investment success.
Whether you're saving for retirement or planning a vacation, creating an effective budget is a great way to save money and avoid overspending. With a budget in hand, you'll have more control over your assets and can effectively track progress for any financial planning goals you've set. Below is a comprehensive guide that will help you create a budget that works for you.
Financial Planning is often a term used colloquially to mean managing one’s money, but it isn’t exclusive to saving and implementing market strategies. It is also safeguarding those assets for the future through analyzing special financial needs (death, disability, job loss, monetary windfall), taxation implications, medical/health planning, and liability concerns. Most professionals offer a couple specialized services but not all.
Insurance is the base of the financial pyramid, creating a solid foundation upon which you will build your wealth. It provides protection against any unforeseen event that can potentially jeopardize your long-term goals. The most important idea to understand about insurance is that it is pure and simple the best way to protect yourself against the risk of loss. If you do not put anything aside for your financial protection you are exposing your plans to risk.
Most of the lessons we have learned as Advisors is how we turn communication into actionable and successful plans to reach your goals. How we utilize resources for your benefit and the process that takes place, provides us with insight on how to best serve you, our clients. Financial Advising is both an Art and a Science.
Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement
By Wade D. Pfau, Ph.D., CFA
Reverse Mortgages are a financing tool that have largely been ignored by retirement and financial planning professionals because of the negative connotation from years past. Dr. Pfau was interested in exploring this untapped resource and how it may fit into a retirement plan in a beneficial way and aren’t inherently a bad idea. The countless hours he spent researching reverse mortgages is apparent.
As you’ve learned throughout this master class, financial planning is as much about money as it is about articulating and prioritizing your goals. Your goals can be short-term or long-term, but understanding their role in the overall financial process is critical so that you don’t mismanage your assets along the way.
During your income-earning years, maximize your retirement plan contributions to build your nest egg and retirement savings:
A 401(k) plan is a retirement savings plan sponsored by your employer, which allows you to save and invest part of your paycheck before taxes are taken out. Many employers offer an employer match, usually ranging dollar for dollar anywhere from 2-5% of your salary deferral (depending on the plan). If you elect not to participate, you essentially leave money on the table.
Insurance is a critical element of your financial plan and the foundation of your pyramid. Different kinds of insurance (including home, health, and car insurance) protect you and your family against the cost of accidents, illness or medical needs, and other unexpected loss.
Divorce is not only a strain on your emotional well-being but also your financial well-being. Many times we only focus on the emotional aspect of the split however, it is important to consider the long-term implications. Additionally, your financial rights are dictated by the state you live in. California is a community property state therefore assets will legally be split 50/50 unless a prenuptial agreement exists.