Tuesday, January 1, 2008

Smart Investing Choices to Kick off 2008

Nice bull
Review, review, review
While you are making resolutions, setting goals and getting ready for a fantastic 2008 - don't forget to review your finances. Review
  • Your investment plan and returns to date
  • Your asset allocation and rebalancing your portfolio as needed
  • New investment options like emerging markets, REITS etc.
  • Your cash position (emergency fund) to manage times of high volatility (2008 may be anther volatile year for the US stock market)

Retirement planning
"The GAO (Government Accountability Office) found that 21 percent of households that had received lump-sum 401(K) distributions for a pervious job, nearly half cashed out the funds for another use."
A leaking 401(K) account can cost you dearly when you consider the penalties and the lost opportunity to grow that money tax deferred. Also remember to invest in a 401(K), review your asset allocation and avoid taking a loan against your 401(K) account.

Insurance
Do you have enough? Are you paying too much for auto insurance and maybe need some extra coverage for that addition to your house? Make sure you have enough coverage at reasonable prices. Also think twice before you buy certain insurances. Motley Fools suggests a list of insurances you are better off avoiding -
  • Mortgage life insurance (consider term life instead)
  • Credit-card-loss-prevention insurance (your losses are capped at $50 by law)
  • Cancer insurance (check your health care insurance before getting extra coverage)
  • Accidental death insurance (consider term life instead)
  • Involuntary-unemployment insurance (have an emergency fund to last you 3-6 months)
  • Life insurance (are you single, childless, no dependents...)

Start now
  • Setup an emergency fund that can sustain you for three to six months.
  • Consider options (how about 101 ways!) to trim expenses
  • Pay yourself first!
  • Learn about investing - check out some book recommendations on the side!

References
Suze says Get Your Financial Priorities Straight for 2008
WSJ presents
Strategies for a Healthy, Wealthy, and Wise 2008
Fools take on
9 Retirement Killers

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2 comments:

Dawn said...

Nice Post...
I just opened our first brokerage account today. We had always invested in real estate and saved our cash in CD's. But we have decided it's not to late to start investing in the markets.
I'll be reading your blog...
Good Luck and God Bless in 2008!

Jack said...

Remember to check your credit history (free at AnnualCreditReport.com) and make sure old accounts are closed. Follow-up immediately on any discrepancies.