Financial Planning for Beginners

Doing your Own Financial Planning

We all work for our money (well let’s hope so) and if you haven’t thought about retirement already, you better start thinking about it NOW.  The earlier you start to save, the more money you’re going to have when you retire.

Many elderly people today find themselves in the retirement age and they aren’t able to enjoy it because they were irresponsible with their money.  This leads them to downgrading their homes, living on ramen noodles, and not be able to have any hobbies to enjoy.  In order to avoid this mess, it’s possible that you can do your own financial planning so that you can have a brighter future.

Think of your family first

Before you start planning for the future, make sure you keep your family in mind.  Meet up with an attorney to create a will, so that when you do die, there won’t be any controversy over your belongings.  This saves a lot of stress and time with your family.  Remember, you can always go back and edit your will in the future.  Have something simple set up today.

Start your Research

Whether you’re clueless or a pro, you’re going to want to know what you want to invest in.  Depending on your age, this will depend on how aggressive you’ll want to be.  If you’re in your early twenties, you’ll want to invest in something that’s slow growing over time like the S+P 500.  It’s always nicer to have a slower growth mutual fund than an aggressive stock that loses its value quicker than it gains.

Even if you don’t want to hire a financial advisor, I would highly advise you meet with one once to get information on where you should be headed.  Just because you’re meeting with one doesn’t mean you’ll have to take their advice or sign up for their services.  A lot of the times they will lead you down the right path in a way you never thought of before.  If you don’t like the idea of a financial advisor, you can always talk with family and relatives and see how they are planning for retirement.

Diversify!

When you’re planning for your retirement, remember to keep this keyword in mind.  You’ll never want to have all of your money in one basket; this is a big no-no.  If one mutual fund fails, you’ll lose all your money.  This is why you’ll want to spread it across many sectors and funds, this way if one sector fails, you’ll have another one to fall back on.

There are plenty of financial tools to use once you sign up with a broker.  Many brokerage firms will offer screeners, tools, and advice that can help you with your retirement.  Make sure you dig deeper when it comes to these tools.

There’s so much to retirement funds, I can’t explain it all on one post, it’s up to you to do all the research over the next few months and learn as much as possible if you’re new to the game.  Even if you’re a pro, there’s always more to catch up on with the latest tools and gadgets.  Below are a few firms that I recommend you should do business with –

Firstrade.com
Ameritrade.com
ETrade.com

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