Investing

When looking at your retirement plan options at work, what should you focus on and what should you ignore?

3 thoughts on “Investing”

  1. Mike Finley says:

    (1) Identify the cost of each investment within the plan. This is called the expense ratio and each mutual fund has one (some stable funds do not as they provide a guaranteed low return per year). You want to pay as little as possible when investing. Higher returns will follow.

    (2) You want to know what that fund owns in securities (stocks, bonds, cash, and Real estate). Does it own stocks (large, small, growth, value, etc.) in the U.S. or overseas? Does it own bonds (quality or junk, term?) in the U.S. or overseas? Does it own some combination?

    (3) Do they offer the Roth as well as the traditional? For low to moderate income people (under $60,000 per year), consider the Roth. For those making over $60,000 per year, consider the traditional. Current taxes and future taxes (estimated) will help you decide this issue.

    Get those two things figured out and you are way ahead of the pack. Here is a bit of advice. Get your expense ratio below .10% on your funds. If your employer doesn’t offer funds that cheap, RAISE HELL UNTIL THEY DO. High cost plans cost you a great deal of money over time. Squeeze out the cost!

    Go heavy on stocks when you are young (under 50). Time has shown that stocks will produce by far the most return with the inevitable ups and downs along the way. Reduce your stock exposure as you go over 50 and start winding down toward retirement. Read What Color is the Sky for specifics.

    (4) What not to focus on? Ignore the past returns. They mean little to nothing. The past does not tell you what the future will hold. Go right past those 1, 3, 5 and 10 year returns as you focus on the important stuff like cost and the securities owned. Financial freedom to follow!

  2. Mike Finley says:

    (1) Identify the cost of each investment within the plan. This is called the expense ratio and each mutual fund has one (some stable funds do not as they provide a guaranteed low return per year). You want to pay as little as possible when investing. Higher returns will follow.

    (2) You want to know what that fund owns in securities (stocks, bonds, cash, and Real estate). Does it own stocks (large, small, growth, value, etc.) in the U.S. or overseas? Does it own bonds (quality or junk, term?) in the U.S. or overseas? Does it own some combination?

    (3) Do they offer the Roth as well as the traditional? For low to moderate income people (under $60,000 per year), consider the Roth. For those making over $60,000 per year, consider the traditional. Current taxes and future taxes (estimated) will help you decide this issue.

    Get those two things figured out and you are way ahead of the pack. Here is a bit of advice. Get your expense ratio below .10% on your funds. If your employer doesn’t offer funds that cheap, RAISE HELL UNTIL THEY DO. High cost plans cost you a great deal of money over time. Squeeze out the cost!

    Go heavy on stocks when you are young (under 50). Time has shown that stocks will produce by far the most return with the inevitable ups and downs along the way. Reduce your stock exposure as you go over 50 and start winding down toward retirement. Read What Color is the Sky for specifics.

    (4) What not to focus on? Ignore the past returns. They mean little to nothing. The past does not tell you what the future will hold. Go right past those 1, 3, 5 and 10 year returns as you focus on the important stuff like cost and the securities owned. Financial freedom to follow!

  3. Mike Finley says:

    (1) Identify the cost of each investment within the plan. This is called the expense ratio and each mutual fund has one (some stable funds do not as they provide a guaranteed low return per year). You want to pay as little as possible when investing. Higher returns will follow.

    (2) You want to know what that fund owns in securities (stocks, bonds, cash, and Real estate). Does it own stocks (large, mid-size, small, growth, value, etc.) in the U.S. or overseas? Does it own bonds (quality or junk, term?) in the U.S. or overseas? Does it own some combination?

    (3) Do they offer the Roth as well as the traditional? For low to moderate income people (under $60,000 per year), consider the Roth. For those making over $60,000 per year, consider the traditional. Current taxes and future taxes (estimated) will help you decide this issue.

    Get those two things figured out and you are way ahead of the pack. Here is a bit of advice. Get your expense ratio below .10% on your funds. If your employer doesn’t offer funds that cheap, RAISE HELL UNTIL THEY DO. High cost plans cost you a great deal of money over time. Squeeze out the cost!

    Go heavy on stocks when you are young (under 50). Time has shown that stocks will produce by far the most return with the inevitable ups and downs along the way. Reduce your stock exposure as you go over 50 and start winding down toward retirement. Read What Color is the Sky for specifics.

    (4) What should you not focus on? Ignore the past returns on each fund. They mean little to nothing. The past does not tell you what the future will hold. Go right past those 1, 3, 5 and 10 year returns as you focus on the important stuff like cost and the securities owned. Financial freedom to follow!

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