Advising Clients since 1980
Step One: Define Your Financial Goals
Goal setting helps you:
Focus your financial perspective into a financial investment plan
Turn indefinite desires into concrete objectives
Have an incentive to meet your goals
Set up a timeline to reach your goals
Prioritize your goals
Step Two: Set Up a Time Frame for Reaching Your Goals
Time is always a factor in investing.
If you’re 25 years old and want a comfortable retirement at age 65, you have 40 years to reach your goal. If you’re 50 and just starting to save for a retirement at age 65, your 15-year window calls for larger savings each year and a closer consideration of the return you’ll need to make on your investments.
Time plays an important role in saving for a child’s college education, too. If you start saving when a child is newborn or 1-year old, you have much more time to accumulate assets and growth. You’ll have to save much more each year if you start when the child is 14.
Step Three: Calculate How Much You Need to Save
For each of your goals, you need to “crunch the numbers” so you can see the economic scenarios of how your investments might perform over time.
Step Four: Start Saving Now
Here are some great reasons to start saving as soon as possible:
The longer your money can work for you, the greater the chance your investments will grow
The longer your money has to grow, the better you’ll be able to ride out the ups and downs of the economy
The more time you have to attain your goal, the less risk you’ll have to take
Some investments are taxed at a lower rate the longer you own themGiving yourself more time to save can reduce the emotional pressure on you
Step Five: Short/Long-Term Investing
How “short” or “long” is a short-term or long-term goal?
That depends on the purpose of the investment and on your own perspective. A goal that is less than five years away can be considered short-term. A goal that is ten years or more away can be classified as long-term. The rest are often considered medium-term.
Preparing for retirement is traditionally seen as a long-term goal. But you may choose to fine-tune your portfolio and invest as market conditions, investment performance, your overall risk level and other factors warrant.
And as you approach retirement age, some of your retirement investments may become short-term to cover impending spending needs.
Step Six: Tax-Deferred Investments
Some investment vehicles allow earnings and contributions to grow tax-deferred, and they can help you achieve certain goals. For instance, they might put more money to work for you during the growing years. Income tax is generally due when you take distributions.
Tax-deferred retirement plans (such as 401(k) plans) and traditional IRAs offer this type of tax-deferred growth. Roth IRAs also offer tax-deferred growth and possibly income tax-free distributions. For college education saving, Qualified State Tuition Programs, Education IRAs and U.S. Savings Bonds can provide tax-deferred growth and other tax advantages.
Step Seven: Consider Other Factors
Here are some important factors to consider in getting started (and continuing) with your investment programs:
The rate of return (the amount that your contributions will earn)
Inflation (increases in the cost of living)-now and down the road
Liquidity (being able to get your money right away when you need it)
Risk (everyone has a different comfort level with risk)
Taxes (different types of investments are subject to different taxation rates or may be exempt from current or future income tax)Your current assets and debts
Your marital status
Your spouse’s employmentYour children and their ages
Your age, health status, life expectancy, and that of your spouse
Step Eight: Monitor Your Progress
Review your goals periodically, the progress you’ve made, and whether or not you have new or different goals. You should do this review process at least two or three times a year.
You can use a service like Shoreline Wealth & Investment Management to check on the performance of your investments. Shoreline Wealth & Investment Management also offers a “total picture” view of your investments and goals to be sure that your retirement investments will continue to keep you on track to reach your ultimate goals.
Step Nine: Put it All Together
Here are some basic guidelines for meeting all your goals:
Set both minimum and desired financial goals
Educate yourself about your investment options
Understand what you’re investing in, and why
Keep your risk comfort level in mind
Take action and avoid procrastination
Monitor your progress and your objectives
Shoreline’s Competitive Edge
We are a network of independent professionals with over 150 years of combined experience in wealth management and advice. Members of this network can be used individually or collectively for a single program or a series of seminars or workshops for your company or organization.
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If you’d like more information about how diversified investment advisors can help you achieve your financial objectives through personalized wealth or retirement and risk management strategies, please contact us. We welcome the opportunity to discuss your unique needs and how we may best meet them.
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Charles M. Bloom, Registered Principal offers securities and advisory services through Centaurus Financial, Inc. - Member FINRA and SIPC - 775 Avenida Pequena, CA, 93111 (mailing address: 3905 State Street Suite 7173, Santa Barbara, CA, 93105) - CA Life Insurance License No. 0A52786 - Centaurus Financial, Inc. and Shoreline Wealth & Investment Management are not affiliated companies.
The information contained in this web site is neither an offer nor solicitation of any security or service.
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