As you know, the holiday season can be joyous, hectic, celebratory — and expensive. And while hosting family gatherings and giving presents to loved ones can be fulfilling, these things are even better when they don’t add more debt. Follow these smart money-management techniques over the next few weeks to keep your debt in check. To begin with, establish realistic budgets for both entertaining and gift giving. When hosting family and friends, don’t go overboard on expenditures.
If you have kids — or even if you don’t — you’re probably aware that Halloween is fast approaching. Of course, you may find the ghouls, witches and creepy impersonations of celebrities to be more amusing than alarming, but, as you go through life, you will find some things are generally frightening — such as investment moves that are misdirected.
For a variety of reasons, many people, particularly those in the baby boom generation, are considering retiring later than they might have originally planned. If you’re in this group, you’ll want to take advantage of those extra working years by contributing to a retirement plan that can help you build resources, defer taxes and maximize income. Let’s look at two retirement plans — the “owner-only” 401(k) and the defined benefit plan.
Like every other investor, you prefer not to see the value of your investments drop. But at some point they will fall simply because of the ups and downs of the market. And how you respond to short-term losses can help determine if you enjoy long-term investment success. Investors’ feelings about losses can be complex. In the field of economics, an area of study is devoted to “loss aversion” — the concept that people dislike losing money so much that, given a choice, they’d prefer to avoid losses rather than take gains. For example, if you have a high degree of loss aversion, then you will find greater dissatisfaction by losing $100 than you’d get satisfaction from taking a $100 profit.
On Sept. 5, we observe Labor Day, which is dedicated to the social and economic achievements of American workers. Of course, if you’re like most people, work is essential to your life, both as a means of personal fulfillment and as a necessity for achieving your financial goals. But if you’re going to attain those goals, you’ll want your investments to work as hard as you do.
Just when you thought you could take a break from financial drama, following the resolution of the debt ceiling issue, here comes Act 2: the downgrade of the U.S. long-term credit rating. As a citizen, you may be feeling frustrated. And as an investor, you might be getting worried. But is this concern justified?
You don’t need to have young children to be keenly aware that we’ve reached that “back-to-school” time of year. Whether you’re shopping for school supplies or not, you may want to take a cue from this season to think about getting a little more education yourself — specifically, investment education. Many people find the language of investing to be confusing, but with a little effort, you can learn important concepts and principles.
In June 2004, the federal funds rate — the interest rate that banks charge each other for overnight loans — stood at a low 1 percent. Since that time, the Federal Reserve Board raised this rate 10 consecutive times, so that it’s now at 3.5 percent. These rate hikes may make the evening news —but what do they mean to you, as an investor? Before you can answer this question, you need to be somewhat familiar with why the Federal Reserve raises rates in the first place.
Your 401(k) offers tax-deductible contributions, tax-deferred growth of earnings potential and a variety of investment options — so it’s a great tool for building retirement savings.
The school year is coming to a close, which means that if you have young children, you are now one year closer to college days — and college bills.