Here are some financial tips to follow, as you work towards improving your finances and plan for your future.
There is now way to determine where interest rates and stocks are headed. You should put more effort into managing the risk level of your portfolio, trimming taxes, and cutting investment costs. Don’t focus on trying to forecast returns.
Using commissions to compensate your financial adviser is a huge mistake. Although it can be cheaper than using a percentage of your assets, the use of commissions can cause your adviser to make suspect recommendations. You may be advised to purchase higher commission products and trade more, because of the incentives for them.
Insurance is viewed as a waste of money. There are some people that benefit from an insurance policy, such as the life insurance from someone dying, home insurance from a house burning down, or a variety of different disasters. There are some situations where you may collect from a policy, but were able to pay for the loss out of your own pockets. This means that you are over-insured and you should cut back on your policy or even remove it entirely.
The perfect low-risk investment is paying down your mortgage. Although there may not be a high return, the interest you are saving could possibly be higher than what a bond would yield. At the same time, the end result is substantial financial freedom. One of your goals should be retiring mortgage-free.
Do not budget. Although it may seem odd, budgeting can become a tedious exercise. Instead, you should focus on saving a specific amount of money every month. Once you have determined what you will plan to save, the need to budget becomes obsolete.
You should never carry a credit card balance. Never make a purchase with a credit card, unless you are sure you can pay the balance off in full. The only other reason to use a credit card is for a dire emergency.