July is as good a time as any to find out whether your goals are being met or whether you must tweak your plans.
Follow these tips and you’ll be in a better position come January as you look back at the year recently completed:
1. Define your foundation
— The start of any sound investing plan means that you need to determine what you want to get out of your investment strategy. This means understanding what you need to have on hand for retirement and how you want to live in your golden years. Your foundation should also include college education for your children, leisure pursuits if important to you and possibly charitable donations as part of your legacy.
2. Know your money
— You earn a salary, but you may also have other streams of income or promised monies such as your 401(k) plan, an IRA or some long term investment. You may also own a house, own other real estate and you probably have cash, jewelry, gold coins and antiques. Your assets, if liquidated — do you know what they would be worth today?
3. Understand your risk level
— Not every investor can stomach risk, with some people more risk adverse than others. This is where you must determine if you need a “sure bet” or if you’re willing to bet some or all of the house. A financial planner can help you gauge your risk tolerance and help you find a happy medium to ensure steady growth.
4. Explore your territory
— With risk level determined, you’re positioned to review your current investments to see which ones fit your criteria and those that don’t. Selling everything that falls outside of your comfort zone is a possibility. However, you need to consider current market conditions and related fees. A tax advisor can help you determine how to handle potential losses with some assets possibly worth donating to charity for a tax write off. Once unwanted assets have been sold, you can invest according to your current goals.
5. Tie up loose ends
— At midyear, are your investment goals on track? You might think that they are, but your second quarter statements — which are still weeks away from getting into your hands — may tell you otherwise. Some things to consider: maximizing your 401(k) match, evaluating your retirement funds, appraising your house for its current value, paying off debt and overhauling your personal budget.
Working with a financial planner can help you fine tune your financing strategy and give you another set of eyes to help direct your path. Tough economic conditions means that you have little room for making mistakes and not much time to get everything on track.
- David M Greene
- BiggerPockets Publishing
- Audible Audiobook
- Gordon Murray, Daniel C. Goldie
- Business Plus
- Kindle Edition
- Biggerpockets
- Brandon Turner, Heather Turner
- Publisher: BiggerPockets
Last update on 2019-11-21 / Affiliate links / Images from Amazon Product Advertising API
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