OK, now that each of us has decided to take charge of our own destiny, and given the fact that we are all headed down the same road, what’s the best way to get into the express lane? In other words, how do we get there from here?
By now, none of these concepts should be new to you. Nevertheless, they are appearing again as a reminder of their importance in helping you establish and maintain good credit, and thereby achieve your goals and aspirations.
As you have seen throughout this blog, it’s all about credit. Many people believe that income is the solution to everything. Well, in the real world, it’s really income in combination with credit and credit ratings. Even people with large incomes can have impaired credit ratings and therefore will pay excessive amounts for credit.
Remember before you were 18 years old and you thought that 18 would never come? How about the uncles or aunts in their thirties who seemed like old people when you were growing up? Well, time passes, and eventually retirement will come. We need to make certain that we can “afford” to retire.
Do you want to work until you are 76 years old? Maybe, but probably not. Either way, the tips above suggest that each of us prepare for the future by establishing retirement and investment accounts early in life. Retirement accounts were created to ensure having money after retire ment. Many retirement plans allow you to directly transfer contributions from your salary before taxes. Some companies match your contributions to this plan. The rates of return depend on how you choose to invest (i.e. stocks, bonds, CDs, etc.) The main retirement account options are: IRA, 401(k), 403(b), Keogh, and SEP (Simplified Employee Pension). Ask your financial advisor to help you choose the best plan for you.
Investment accounts include stocks, shares in mutual funds, bonds, etc. Interest and dividends from these investments are taxable and can fluctuate significantly. Furthermore, since they are not insured by the FDIC, there is the risk of losing both the principal invested and the accumulated profit. If you are new to investing, seek a financial advisor to assist you. It is important to make consistent contributions and to diversify your investments. Over the years, it can make a huge difference.
In addition, if you are a homeowner, keep your eye on mortgage rates. If interest rates go down, consider refinancing your mortgage. Remember, however, to take a close look at all of the costs associated with refinancing and make sure refinancing will benefit your financial situation. Review refinancing fees, prepayment penalties if they apply, and closing costs and measure these costs against the benefits of a lower monthly payment. When you are considering buying a home, shop around for mortgage rates.
A will is an extremely important and valuable tool that everyone should have.
Can you ever be too prepared for the unexpected?
No. Therefore, it is wise to make sure that you are prepared for as many unknowns as possible. However, just like anything else, moderation may be best. To avoid becoming overly insured—that is, purchasing more than is needed—you should always thoroughly check out various types of policies, coverage, terms, and cost.
