Finance 101: Invest like Warren Buffet...

Apr 28, 2016 by

Warren Buffet is perhaps the greatest investor of the century.  He is one of the richest people on the planet. How did he get there? Smart investing which increased his net worth to upwards of $68 billion! Want to know what his secret is to successful investing? His quote below is the direction he gave for how he wants his wife’s investments to managed after he passes: “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.” Take the advice from the genius investor himself – index funds are the way to...

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When to Start Saving for Retirement?...

Apr 26, 2016 by

When should you start saving for retirement? Now! Time is a major factor when it comes to investing.  The sooner you start, the better off you will be in the long run. Take this scenario for example: Steve is 25 years old and contributes $6,000 a year to a retirement account until he retires at age 60.  Assuming a standard 7% average return on investment over this time, Steve will have $887,480 when he reaches retirement. Not bad, huh? Cindy is 40 years old and also wants to retire at age 60. However in order for Cindy to retire with the same amount as Steve, she will have to invest over $20,000 each year just to catch up! These numbers are astounding! The reason for this difference is something called compound interest.  Essentially compound interest is your...

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Finance 101: Mutual Funds

Apr 25, 2016 by

If you only have $100 to invest, how do you create a well balanced portfolio? The answer: mutual funds. Mutual funds are investment vehicles that allow investors such as yourself to put money into diversified investments by pooling money with others.   These funds are run by portfolio managers, who buy and sell assets to create gains for the investors. In this example, you could invest your $100 into a mutual fund that has an asset allocation of %60 stocks, %30 bonds, and %10 cash.  When you do so you buy a unit (a share) of the fund which, along with the many other investors, allows your investment to be diversified to match the mutual funds profile. There are hundreds of types of mutual funds available to investors. Some track market indexes, others follow certain industries, and some...

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4 Easy Steps to Automate Your Finances...

Apr 25, 2016 by

In my opinion there is no better way to kick-start your finances, than automating.  Automation can put your finances on autopilot and help simplify your life.  Here are 4 quick and easy areas to automate your finances: Retirement Accounts – For all those that work for employers with retirement savings programs (401k/403b), the first (and biggest) automation decision is your contribution to your retirement. The percentage to save will vary from person to person, but it is important to get started right away! Time is money, and the earlier you start saving, the more you will have in retirement. Direct Deposit – The next best automation decision is where, and how much to direct deposit into your savings/checking accounts. For you this could be an emergency fund, a vacation fund, saving for a new car, or even all...

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Finance 101: Index Funds

Apr 21, 2016 by

If you listen to talk about investment options you have surely heard the term index fund, but what exactly are they? An index fund is a type of mutual fund which is designed to match a particular index. Indexes are groups of publicly traded companies such as the Dow Jones Industrial Average or the Standard & Poor’s (S&P) 500.  For example, an S&P 500 index fund will be composed of all the companies that make up the S&P 500. This way the index fund and the S&P 500 will rise and fall together.  Index funds are considered “passive” investing as they simply track market fluctuations rather than trying to beat the market as “actively” manged funds attempt to do. Investors tend to like index funds because of their low costs. Many studies have shown that reducing investment...

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Where to keep an emergency fund?...

Apr 20, 2016 by

The point of an emergency fund is to keep money safely set a side so that it’s there when you need it.  Although it may be tempting to invest your emergency money when the stock market is rising, try and resist! If you ended up needing your emergency money when the stock market is down, you will either not have enough money available or have to take money out when the market is down (smh).  The essence of an emergency fund is not to get high returns, but to money set aside in a safe location. A safe bet is to place your emergency fund in a high yield savings account. These tend to be in online banks, since they can offer higher rates (as they have no local branches). Here is a handy site to...

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