Retirement Planning Steps
Step 1:
START EARLY! The difference between starting at 20 and 30 and HUGE. For your money to truly reap the benefits of compound interest, TIME is the single greatest factor. Start as early as possible and encourage friends and family to also start now!
Step 2:
Set up a budget. Ensure that all of your bills and debts are being paid off each month. However, just as important, make sure you are paying yourself each month also. Find strong investments that you like, and sit back and let compound interest do its magic.
Step 3:
Take time to learn about different investment vehicles. While stocks are certainly more glamorous investments, for many Mutual Funds or Index Funds or even Bonds may be the SMARTER investments. Realize that there is market risk and if your investments are founded on a company’s strong foundation, you will eventually weather the storm. Don’t panic and liquidate investments merely because it starts to lose money. This is counterintuitive to the “Buy Low, Sell High” principle.
Step 4:
Educate yourself on tax implications. When you compare how much you make over the course of your life, and see what chunk of that gets taken out by taxes, the result is truly eyeopening. Look into different retirement investments vehicles and choose which one is best for you (Roth IRA, 401k, Roth 401 etc).
Comments
Got something to say?