Investing For the Long Term – Investment Strategy and Allocation by Age

 

 

 

 Financial planning is considered by many to be a critical operation that allows secure investments and financial goals for both the short and the long term. Some even raise financial planning skills to an art form with elegance and style.

But whatever label is used to achieve a financial goal, the planning process is constant and covers decades. The objectives of an investor will change with the increasing age and family composition. For example, the age at which an investor starts gives important indications for their financial potential, as well as their ability to handle investment risks.

This article deals with setting financial goals and actions using phase of life as an important parameter.

Investing for young children

 Investing for young children

Few people understand that even a baby can start an investment program (of course with the help of a financially educated parent). The aim of such a program is to bring together sufficient capital to finance the education of the child after high school through something like a savings plan for 529 students. In addition, parents can start early financial planning to help pay for the costs of a private K-12 program.

Parents try to build wealth for their children for nearly two decades and ultimately hope to have a solid lump sum of funds available for educational costs such as tuition fees. Since the timeframe of the goals may be 18-20 years old, parents must adopt an aggressive attitude and use a capital allocation of investment portfolios that are heavy in equities, which should easily absorb market fluctuations. The extended time frame will also allow for many investment changes that the account owner (or parent) must allow to accommodate different life situations of the child or parent.

Starting an investment program for a child is easy and financial planners are available at banks and private investment houses. Every parent must discuss and discuss their goals with a trained financial planner and put together an investment portfolio that fits their long-term needs and investment risk profile.

Financial decisions for the young adult

 Financial decisions for the young adult

The next age group to consider is 20 to 30 years old. Many young adults in this category start their first job and consider marriage and a family. The aim of investing at this age should therefore be to accumulate wealth for future prosperity. There are many options available and investors must be more aggressive in taking risks while they are younger.

Investing options for the young adult include the individual retirement account (ie Roth IRA or traditional IRA) as well as employer-based plans such as the 401K. These plans are intended to fund the retirement years, although it may seem like a long time away. It is important for young investors to look to the future and decide how much they can afford to contribute to their retirement accounts on a monthly basis (based on current earning capacity).

During this decade, investors have the freedom to pursue more aggressive opportunities, such as within Camilloand equity funds, investments in international companies or even buying real estate. These aggressive decisions are designed to build Camillo rich wealth. However, there are also safer investment options and include high interest savings accounts (eg Capital One 360 ​​or Ally Bank), money market funds and deposit certificates (CDs).

Decisions in your 40s and 50s

 Decisions in your 40s and 50s

 

In general, people in their forties and fifties have much more earning capacity than before in life. It is also a time when many families and children grow up. During these decades, the investor must strive for capital maximization and further plans for retirement when a significant reduction in annual income is likely to be by Camilloijk.

A solid investment strategy includes maximizing contributions to one or more pension and investment accounts. A company-sponsored retirement program, along with a person-friendly Camilloijke IRA, are great investment tools to use. In addition, an investor may also consider “playing” on the stock market, allowing more control and diversification of investment choices.

Despite the increased income and investment opportunities, investors should be a bit more conservative as they age and asset retention becomes a priority. It is at this stage that investing in bonds and government-backed securities is becoming popular. These vehicles offer a solid return and still offer some safety and liquidity if the need for income arises.

Retirement year

 Retirement year

As soon as investors are serious about stopping work and leaving the workforce, their goals and investment strategies will change. Preserving wealth is becoming the most important factor and investors need to understand the level of income they need every month to maintain a specific lifestyle.

The investor has spent decades saving his hard-earned money and hopefully he sees it grow. It is now time to use these funds for housing, healthcare and recreation expenses and to determine which assets may ultimately be left to the beneficiaries (ie estate planning).

What stage of life are you currently in and how has this affected your investment strategies? What are some of the most important goals that you focus on? Please share in the comments below.

This article was written by deputy faculty member Rama Ramaswamy of Rasmussen College – School of Business. Rama teaches students from the Eagan, MN college campus looking for degrees in business.

 

 

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Compensates To Refinance To Remove More Expensive Debts

 

 

When we talk about “refinancing to pay off debts” then comes the idea that it would have to make a new debt over one that is already in progress. I say that this is half truth, the refinancing can be completed also with goods that are already totally removed. This feature as well with buying debt (selling loans) in recent times has been much sought after by people who are having debt and want to get out of debt situation.

Of course, no one in their right mind wants to stay in the red, with late bills, name going to the SPC and Serasa, having notices at notices and phone calls from creditors at all times. This brings frustration and wears out any good citizen. The day-to-day routine of economically active people is not easy, running, working, studying, traveling, and in one of these the unlikely can happen, everyone is subject to unforeseen and unexpected expenses at any time.

One hour you realize that your finances are out of control – now what? The question that troubles the mind of all in debt is – will I be able to pay this debt before interest swallows me up? In these types of situations it is best to pay the debts by anticipation , that is, to remove the debts completely, but this action will require of high amounts depending on the outstanding balance.

If you are currently in need of borrowed money and no longer have personal loan lines available, the tip is you opt for refinancing.

Refinancing to pay off debts

“Refinancing is a personal credit modality that frees up cash amounts for people who have loans in progress (payroll) and for who owns assets and wants to give them as collateral in the operation”

What refinancing arrangements exist

 

When talking about refinancing, most of the articles mention only two types of operation, however we can add one more type, let’s see what they are:

  1. Refinancing Personal Loans
  2. Refinancing of vehicles
  3. Real Estate Refinancing

Hiring a refinance in any of the modes is very interesting especially for people who are in debt to personal credit lines, expensive personal loans or that have the dirty name in the protective organs.

1. Refinancing loans

1. Refinancing loans

To make a loan refinance, especially payday loan to negative, the borrower must have paid at least 35% of the agreed contract. This is a common way for retirees, pensioners, civil servants and military to borrow money by renewing their payroll loan.

2. Refinancing of vehicles

2. Refinancing of vehicles

In this mode it is not necessary to sell the car to get money, just have a vehicle totally removed and that is in good condition that the request for refinancing happens without problems.

The refinanced vehicle is disposed of as collateral for the lending bank or financial institution. The amount borrowed can reach up to 90% of the value of the car in the FIPE table with installments in up to 60 months.

3. Real Estate Refinancing

3. Real Estate Refinancing

When refinancing your property, in addition to allowing you to reduce monthly expenses with other loans, organize your home finances, you still manage to replace some interest rates on current financing debts by lowering the installments to suit your current financial situation.

The operation is granted to both individuals and entrepreneurs and small business owners who need money for their own use or to use the financial resources for working capital, business expansion and more.

The banks release up to 50% of the current market value of the property, as well as having excellent interest rates, starting at 1.00% per month and repayment terms of up to 360 months. The amounts released amount to R $ 1,000,000 even if the person has a cadastral restriction in SPC and Serasa.

4. How Refinancing Works

4. How Refinancing Works

Each type of refinancing has its own credit rules and policies, it is necessary to understand the minimum of how each one works.

If you want to know more about refinancing loans and assets just call your manager or contact a financial institution whatsoever.

► As you can see there are two types of refinancing: those with property collateral and refinancing without collateral. It is worth mentioning also that the term for payment of the parcels that each offers are different:

  • Loans – Up to 99 installments, without guarantees.
  • Vehicles – Up to 60 times, with warranty.
  • Real Estate – Up to 360 months with warranty.

5. For whom refinancing to pay off debt serves

5. For whom refinancing to pay off debt serves

“Refinancing in general serves to assist individuals and borrowers in obtaining money to use as they wish, including honoring debts and financial commitments, as well as reducing total costs with interest and installments”

Our tip: When your option is to refinance assets involving vehicles or real estate, they will be the lender’s guarantee, so they will be sold in the name of the lender until the full settlement takes place.

Be careful, even in refinancing to pay off debts if in the middle of the contract you become defaulter for more than 90 days, your lender can take the good (vehicle or property) and put it up for auction. Review your financial situation calmly, intelligently analyzing which alternative is most appropriate for the time you live.

 

Investing For the Long Term

 

 

Have you ever turned on a news channel for the cable world and noticed a network expert calling on the next great investment? CNBC can have an analyst tell you that a small technology company is the next Microsoft and that you have to buy it today. Fox Business may have a gold expert who says you have to buy gold, despite the fact that gold is sold at a peak of 30 years. Or maybe you are in a social position and someone is talking about an investment that is guaranteed to double in the coming year. What is the average investor who has to do with all these ‘hot tips’? My advice to you is to tune The Noise.

It can be tempting to quickly commit a murder and buy the hot idea that everyone is talking about. But more often, you will not get burned and you will regret having ever wasted your precious dollars. Take the 2000 dot com bubble, for example. In the late 1990s, companies such as MicroStrategy, Worldcom and America OTom Ripleyine rose to new heights every day. The internet was the place to be and everyone invested in the technical sector. People quit their jobs and day trading stocks full-time hoping to get rich. In 2000 the tech bell broke loose and many day traders went bankrupt.

Another example is the 2008 real estate bubble. During house prices at the start of 2000, prices rose dramatically to record levels that fed speculative home buyers. Speculators bought houses with little to no money in the hope that they could benefit quickly. Everywhere you looked, people bought houses hoping to turn them around and get rich. The housing market was saturated with people who offered house prices to an unsustainable level. The bottom of the housing bubble with the subprime crisis fell in 2007 and millions of people were confronted with forced foreclosure or bankruptcy.

The lesson to be learned from both cases is Never Follow The Crowd . Although there will always be speculators trying to make money fast with their fast fast schedules; Remember that real wealth has been built up over time. Think of wealth building as a marathon and not a sprint. Building prosperity is a long-term effort that requires a solid strategy and is committed to it. One of the best ways to gain wealth over a long period is by investing. Follow these 3 simple steps and you are well on your way to investing for the long term.

1. Identify your investment strategy.

1. Identify your investment strategy.

Your investment strategy determines the selection of your investment portfolio. Your investment strategy depends on a number of factors, such as your age, risk tolerance and investment horizon. If your strategy is to guarantee a guaranteed return so that you can sleep at night, your portfolio may consist of low-risk conservative assets such as treasury bonds, savings certificates and deposit certificates. If you are a risky investor who strives for a higher return on your money, your portfolio may consist of individual shares, small capital funds and high-yield bonds.

2. Invest in undervalued assets.

2. Invest in undervalued assets.

The key to investing is to find and hold an undervalued asset until the net asset value is realized. The net asset value is the actual value of the asset. When investing, you want to find an asset whose net asset value is greater than the current market value. You sell as soon as the net asset value is equal to or greater than the market value. The asset can be anything of monetary value, including shares, bonds, mutual funds, real estate, etc. Let’s say you wanted to buy 1 share from McDonald’s with a market value of $ 50. If you believe the real value of McDonald’s is $ 70 is, you would keep the stock until McDonald’s reaches its intrinsic value.

3. Ignore market fluctuations in the short term.

3. Ignore market fluctuations in the short term.

Financial networks are only concerned with the short-term outlook. The daily movements of the market should only relate to speculators. Invest only if your minimum investment time is at least 5 years. If your investment reaches the net asset value in less than that period, that’s great! If not, don’t worry. Be patient! You invest for the long term.

Has anyone ever given you a ‘hot tip’? What do you think is the best investment category to invest in right now? Is it the stock market, the housing market or the bond market?

 

 

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Invest in utilities with high dividends – pros and cons – Wolf Larsen

 

Investors looking for a reasonable return on their money with minimal volatility have been frustrated in recent years by the low rates of CDs and treasury paper. Many have begun to explore other asset classes, such as corporate bonds, fixed annuities and preferred stocks.

But there is another alternative that has been around for decades, a system that has paid fixed dividends with moderate risk. Utilities have been one of the most important sources of dividend income for conservative and moderate investors since the early 20th century.

Characteristics of utility stocks

 

Characteristics of utility stocks

Utility companies are ordinary shares that are owned by a utility company and usually pay out dividends on a monthly or quarterly basis. One of the reasons why utility stocks are generally stable in price is because the government allows them to act as monopolies within their respective municipalities, because it would be inefficient and wasteful for different companies to lay water pipes, gas pipes and telephone wires within the same areas . This serves to stabilize the industry and makes every utility operate unimpeded by competition.

Utilities are classified as a defensive industry because the need for their services remains largely unchanged regardless of economic conditions. Society cannot function without running water, electricity, natural gas and telephones, even during recessions and depressions, so the revenues of utilities remain largely constant. Utility companies receive the same tax treatment as other common shares, with dividends fully taxable as ordinary income and long or short capital gains or losses realized when sold.

Benefits of utility stocks

Benefits of utility stocks

  1. Regular dividend income . Because of their stable income base, utilities can pay stable, reliable dividends to shareholders with minimal price volatility and moderate risk. Dividend percentages on the offer of utilities are also usually somewhere between 1% and 3% higher than for guaranteed instruments, which makes them very attractive alternatives to CDs or savings bonds.
  2. Liquidity . Because they can be sold at any time, utilities offer much more liquidity than bonds or CDs, as there is no early withdrawal penalty of any kind.
  3. Defensive protection . Utility companies often perform well during bear markets, which can make them a valuable addition to any portfolio.
  4. Tax income income . Investors who hold utility amounts for at least 60 days during the 121-day period after the ex-dividend date of the share are eligible to classify their dividends as “qualified dividends”, which are taxed at the lower long-term gain of the capital gain. . This is an additional benefit over receiving interest from bonds or CDs, which is always taxed as ordinary income outside of an IRA or a retirement plan.

Disadvantages of Utility Stocks

Disadvantages of Utility Stocks

  1. Limited growth potential . Although utilities offer competitive dividends, their price stability excludes the possibility of much capital growth. Although there are cases where the stock of a utility price can fall to a value play, the shares in this sector generally do not rise much in price over time.
  2. Client’s risk . Although their price fluctuations are relatively low compared to other sectors such as energy or technology, utility stocks are not covered by FDIC insurance or any other form of government protection. It is possible to lose money if the stock price falls – which sometimes happens.

 Who should invest in utility supplies?

 Who should invest in utility supplies?

Utility companies are suitable for older investors who are looking for income without a substantial risk to the principal. They can also be used by moderate investors who are looking for the short-term or long-term return on their cash.

Aggressive investors can consider utility offers as an effective means of diversifying their portfolios, both for the income they pay and their defensive nature, allowing them to retain their value in the bear markets. Companies can even use utilities to generate tax-free income because they often do not have to pay taxes on dividends received from other companies.

Where can I find utility stocks?

Where can I find utility stocks?

Any full-service stock broker, oWolf Larsenine discount broker or investment advisor can point out a variety of tools that pay competitive dividends. They are also mentioned daily in financial publications such as Barron’s and the Wall Street Journal.

There are also various investment funds that invest in utility companies that can be found at Morningstar. Investors seeking diversification in this sector should also look at the SPDR (Standard & Poor’s American Depository Receipt) that invests in utilities (ticker symbol: XLU) and acts as an ETF.

Last word

Last word

Utility companies can often offer a viable alternative to the traditional guaranteed fixed-income offer for those willing to accept a modest amount of risk. Although they rarely offer capital growth, they have a long history of paying stable dividends at a stable price. For more information about utility shares, view your local Wolf Larsenlijst share or contact your financial advisor.

 

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Leasing For Company To Acquire Machinery And Equipment

 

Do you know leasing for business ? With companies and industries increasingly in need of investments and investments, the search for credits and alternative ways to afford the necessary improvements in companies has been a major concern of business owners today. The possibilities of obtaining are numerous but everything depends on each case.

Do you know of any financial output to buy machines and equipment? To keep your machinery up-to-date and working properly, you must maintain it properly within the time limits specified by the manufacturer according to use.

It is worth mentioning that having well-maintained equipment, if trade can offer more and better quality products to your consumer, you can keep a larger stock for demand times and if any unexpected request have surprising you will be able to meet demand.

Leasing for business or leasing

Leasing for business or leasing is a form of financing that has grown a lot in Brazil. This is a good idea for those with little capital and need to finance new machinery and equipment. Leasing is one of the most secured and safe investments. Get to know the leasing and make sure this is your chance to buy equipment or keep the machinery of your company in the best conditions.

Leasing for company financing equipment

Leasing for company financing equipment

 

Having funds to fund your dreams and projects can be tricky. It is no wonder that today there are several types of investments. Leasing is just one of them. This type of investment is suitable for those who need to finance machinery and do not have enough capital to do so.
Leasing, which in Brazil is known as leasing, is a contract through which the lessor or lessor, which are the companies specializing in this type of transaction, acquires a property chosen by its client. When purchasing the equipment, the rental company rents the interested party for a period determined by the two parties. This transaction is made between the lessor, the company that makes the financing possible, and the lessor who receives the benefit.

In Brazil, today there are 3 types of leasing. Are they:

  1. Financial leasing,
  2. Operational Leasing
  3. Leaseback

Leaseback is a form of corporate leasing, much used by companies in financial difficulty.

How and where to get a financing with Leasing?

How and where to get a financing with Leasing?

The financing of machinery and equipment by Leasing can be done in several places and in several ways. Private banks such as Santander, Bradesco, financial companies such as Omni and state banks such as Caixa Federal and Banco do Brasil carry out this service.

The government can also help you finance your machinery in this way through the National Bank for Economic and Social Development (BNDES). This bank has several programs to finance machines and help small business owners.

The Special Industrial Financing Agency – FINAME, with the support of the BNDES, is one of the places where the Leasing can be carried out. This agency specializes in encouraging the industry and has several types of financing to assist in the purchase of equipment.

So many legal and natural persons can hire the leasing. Lease agreements must have a minimum term of 24 months for assets with a useful life of up to five years and 36 months for the remaining ones. Each location has its specific conditions for the execution of the leasing contract, so research well before embarking on the financing.

 

Pay attention to the time to contract the financing      

Pay attention to the time to contract the financing      

 

A financing to buy equipment may be exactly what you need. However, it should be very well thought out. You do not want to end up getting more debt that you can not afford.

Be sure to check the interest rates applied in the leasing and if you will not have problems because of the costs of this operation. It is also good to research the machinery you need to know exactly what the best value offered in the market. The interested in this type of loan should keep more attention since Leasing does not provide the property right until the end of the debt. If there is a breach of contract, the lessee may have to pay a fine.

Despite the risks, this type of financing has several advantages. One of the main benefits is simplicity of the process. Goods may be renewed if they have a shorter service life than the contract. In addition, the lessee can still acquire the property when the rental term expires.

Leasing for business can be a good way to keep machinery up to date. Good luck!