Ways to Improve Your Financial Health in 2012 & Beyond
March 19, 2012
Provided by Christian Jackson, Life Investors Financial Group, Inc. & Member of Kewanee Hospital Planned Giving Committee
This is the year. Isn’t that what we always say when it comes to resolutions? But it’s really not too late to make 2012 the year you alter your financial health for a better financial future.
“We’re not talking about the obvious steps that many articles recommend, like ‘write your goals down’ and ‘set a budget’,” stated Christian Jackson, Life Investors Financial Group, Inc. “We can look past the clichés and get into the real issues.”
Look at your income source, your expenses, and your debt.How do you earn income? If you earn it from one source, is there effectively a ceiling on it, or is there real potential for your income to rise in the next few years? Now look at your core living expenses, the ones you can’t avoid (such as a mortgage payment, car payment, etc.) Can any core expenses be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt diminishes and expenses stay (relatively) the same.
Maybe you should pay your debt first, maybe not.If you are a business owner or a professional, for example, you’ll likely always have some debt. Your ultimate goal should be to build wealth – and you can plan to build wealth and reduce debt at the same time.
Some debt may be considered “good” debt. A debt may be “good” if it brings you income. For example; if you buy a rental property, you’re paying a mortgage, but that’s considered a “good” debt because you’re getting passive income from the rent payments and there is the possibility the property may increase in value. Credit cards are usually considered “bad” debts because of the nature of items that credit cards are used to purchase.
If you’ll be carrying a debt for a while, put it to a test. Weigh the interest rate on that specific debt against your potential income growth rate and your potential investment returns over the term of the debt. If the interest rate on that debt looks like it will outpace your income growth and investment returns, then you should really think about paying that debt down fast, because you can’t afford that interest rate.
Implement or refine an investment strategy. You should try not to refrain from investing, even when the bears are out. You’re not going to retire on the relatively small elective deferrals from your paycheck; you may retire on the growth or interest that those accumulated assets earn over time compounded over many years. Consistent investing, this year and in years to come, has the potential to help you improve your financial life. As a reminder, investing involves risks and the potential for your assets to lose value.
Manage the money you make on your way to meeting your financial goals.
If you simply accumulate assets, you may have money just sitting there open to different types of risk – inflation risk, market risk, even legal risks. Inflation risk is often the most overlooked. This is especially relevant with the current low interest rate environment.
You may want to request assistance from a financial professional for the wealth you are growing.A financial professional will help to educate you about the principles of wealth building. You can draw on that professional knowledge and assistance this year – and for years to come.
“A key goal of Kewanee Hospital’s Planned Giving Committee is to provide educational information regarding financial planning and wellness that will benefit the members of our community,” Jackson added. “We look forward to offering a seminar on financial wellness in the near future.”
For information on upcoming seminars hosted by Kewanee Hospital’s Development Council, call 309.852.7822, visit www.kewaneehospital.com, or follow the hospital on Facebook.
These views from the named Representative and/or Broker/Dealer should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.