Seven Steps to a Secure Financial Future
Many professionals focus on developing their careers and forget to plan for their financial future. However, it doesn't take a lot of time to understand the basics. To get started, just follow these easy steps:
- Deposit a set amount of cash into an investment account each month. If you invest $1,000 per month at 8% annual interest, it will grow to over $180,000 before taxes in just ten years.
- Avoid credit card debt: pay off monthly balances, or if you must carry a balance, use cards with low interest rates.
- Develop a diversified investment plan for your short- and long-term needs. Bear in mind your liquidity needs, risk tolerance, and time horizon.
- Contribute to an Individual Retirement Account (IRA), a 401(k) plan, or another similar retirement plan for the tax benefits.
- Update your will and any trusts; also, prepare advance directives such as a durable power of attorney, living will, and health care proxy.
- Periodically review whether you need life, health, disability income, or long-term care insurance.
- Set long-term financial goals. Assess your progress toward these goals each year and make adjustments as appropriate.