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Financial
Planning
Start planning and stop worrying!
In a recent Gallup poll, 60% of those surveyed
said they worried about their financial future.
There are a few simple steps you can
take to help reduce your worries:
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Put
aside some amount regularly in savings or other investments.
The compounding of earnings can be substantial. The longer your
investment period, the greater the beneficial effect of compounding. |
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Invest
in what you know. The better informed you are, the
better your investment decisions will be. If you don't want
to learn about investments, consider hiring a money manager
and paying him or her to do your investing for you. |
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Diversify
your investments. Have some of your money in an investment
that is easily converted to cash in case of emergencies. The
old adage "don't put all your eggs in one basket"
is good advice when it comes to your investments. |
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Prepare
an annual balance sheet (a list of all your assets
minus all your debts) to determine your net worth. A comparison
of your annual balance sheets will reveal your success at growing
your retirement funds. |
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Plan
where you want to be financially by retirement age.
The calculators listed below will help you determine your savings
requirements. Once you know how much you need to save, put your
plan into action. Over 90% of Americans must rely on the government
or others for assistance during retirement. With proper planning
and diligence, you can be among those who can retire in comfort. |
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Don't
use credit to purchase consumption items. Wait until
you can pay cash for things which decrease in value. Borrowing
money to purchase a home is usually a sound idea. Using credit
to purchase household furnishings is not. |
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Pay
off your credit card balance every month. Your credit
card should be for the convenience of purchasing, not a source
of permanent finance. The interest rates are much too high. |
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Monitor
your investments to maximize your after-tax return.
Use the calculator below to compare the long-term results of
different interest rates. The difference that a 2% greater return
can make in the growth of your investments is dramatic. |
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Have
your insurance agent do at least an annual review of your insurance
needs to determine that you are neither under- nor
over-insured. Be sure to contact your agent when you buy or
sell any property. |
The Magic of Compounding!
If you could have one of the following
as your pay for thirty days' work, which would you choose? (A) $10,000,
or (B) a penny the first day, two cents the second day, four cents the
third day, eight cents the fourth day, and so on, with each day doubling
on out to thirty days.
The $10,000 sounds very attractive, but
the fact is that the penny doubled each day for thirty days adds up
to over five million dollars. Of course, that is 100% interest compounded
daily, a rate not available to most of us working folk. Nevertheless,
this example shows you the power of compounding on your investment earnings.
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Here
are some easy-to-use calculators. |
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Do you know how much you need to set aside
to fund a college education for your child? Education Funding Calculator
What will your Individual Retirement Account
(IRA) be worth when you get ready to start drawing on it? Retirement
- How much to save and how long will it last?
You can get rough answers to these and
other questions very quickly by using the following calculators and
making a few estimates on your part. If we can be of help or answer
questions for you, please call us.
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New London, CT 06320