In the VSECU Blog you'll find financial and lifestyle resources to help empower possibilities for your personal success.
April is Financial Literacy Month, and I’m taking the concept very literally with some finance book recommendations. There are many books on finance out there, of course, but here are a few of the best books about personal finance, money management, and our financial system that I’ve read.
Financial literacy is more than just the knowledge you need to make responsible financial decisions. It’s also the ability to put that knowledge to good use. Those who are financially literate can create a budget and manage their checking account. They understand how credit cards work and how to use them without racking up debt. And they know what is involved in saving for their future financial needs like college, a home, or retirement.
With interest rates at historic lows for loans and deposits, the current rate environment certainly rewards borrowers but what choices are long-term savers left with?
If you’re changing jobs or are retiring, you’re probably wondering what to do about your employer-sponsored retirement plan, whether it’s a 401(k), a 403(b), or a 457 plan. Should you leave it where it is, roll it into a plan sponsored by your new employer, or roll it over to a self-directed IRA? Each person’s situation is different, but here are some basic considerations to keep in mind as you determine what to do with your investments.
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So, you’re finally taking that next step in your financial stability. You're meeting with a financial advisor to figure out how you can make the most of the assets you’ve got. Maybe you don’t have much money and you’re looking for a place to start. Or maybe you’ve got plenty to invest but you’re moving to a new advisor. Either way, it’s a good idea to go to the meeting prepared so that you can come away with your questions answered and your feet firmly headed down the road toward financial security.
I’m diversified. I have money in three different mattresses! Diversification is a strategy whereby investors spread out their risk by investing in multiple asset classes. In other words, they don’t invest all of their money JUST in domestic stocks or JUST in municipal bonds. They spread it out over a variety of investment types that have different risk profiles. That way, if their domestic stocks are doing poorly (losing money), their investments in bonds may bring in enough of a return to make up for their stock losses.
Determining your financial risk tolerance can help you find a comfortable path to financial independence. Your tolerance for risk includes your capacity to face risk without fear, but it can also take into account your current situation, your goals, and your time horizon. Risk tolerance is complicated but figuring out how much risk you can take on can help you make wise investment choices that won’t cause you undue stress over the years.
Thinking about your financial future can be difficult when you're faced with short-term needs such as rent, groceries, and other bills. Difficult, but not impossible. Your financial plan may seem modest to begin with, but even if you don't have a lot of money, there are ways you can continue to invest in your future. Once you've taken care of your immediate needs, every dollar can make a difference when it comes to your long-term finances. Here's how you can save money to invest on a low budget and start setting yourself up for a more certain financial future.