Do You Know the Different Types of Income?

Not all income is treated the same by the IRS. There are actually multiple types of income that you could generate and which are taxed differently from one another. For example, the income your generate from working is looked upon differently by the IRS than income generated from the sale of stock. Thus, it’s important that you understand the different types of income and how they are taxed. I’m not going to get into a detained examination in the blog post, but I will describe them in a nutshell. The first type of income is ordinary income, which includes things Continue reading Do You Know the Different Types of Income?

Saving for Retirement on Your Own? Beware the Risks

Many people take a do-it-yourself approach to retirement saving. For various reasons–usually because they feel that they can’t afford a financial advisor–they feel that they can do the retirement saving thing alone. Given the amount of free financial education resources found on the Internet as well as the growing number of companies that offering financial planning resources as part of benefits packages, it’s no surprise that some people feel they can do it alone. However, there are risks to going it alone in retirement planning and saving. One area that many one can run into with a DIY retirement is Continue reading Saving for Retirement on Your Own? Beware the Risks

Re-Emphasizing the Importance of Diversification

I wrote about this a few weeks ago, but I want to mention it again–especially as the economy appears to be trending further downwards since–if you have invested your nest egg in the markets and want to protect it, you need to diversify your portfolio. This can be achieved by investing in various types of investments (i.e. stocks, annuities, bonds, etc.), by investing in various types of companies (i.e. blue-chip stocks), and by investing in different market sectors/industries. Diversification is important, especially during tough economic times, because it helps to minimize risk and spread it around your portfolio. By spreading Continue reading Re-Emphasizing the Importance of Diversification

A Good Reminder of the Importance of Diversification

The markets have been going through a downturn over the past few days and, frankly, it’s been kind of scary. Such downturns provide a great reminder of the importance of diversifying your investment portfolio so that you can somewhat mitigate–or at least blunt–the damage such downturns do to your portfolio. While you won’t be able to come out unscathed, you can minimize how much you may stand to lose. And for those who haven’t, it’s never to late to take steps to spread your investments around. You can diversify your portfolio by investing in different market sectors and industries or Continue reading A Good Reminder of the Importance of Diversification

Don’t Get Too Comfortable With the Markets

Chances are you have at least some of your retirement funds tied up in the markets somewhere. Investing–whether it be stocks, bonds, or whatever–is a common and fairly easy way to grow your nest egg while working as well as develop a source of funding once you actually reach retirement. There are many strategies and ways to invest, but that’s not what I’m here to talk about today. What I will talk about though, is how you need to stay on your toes when it comes to investing. Remember, markets can be unpredictable; they can go up and down and Continue reading Don’t Get Too Comfortable With the Markets

Using Asset Allocation to Your Advantage

Asset allocation is an important part of saving and planning for retirement. Having the right asset allocation can help maximize your money and grow your nest egg efficiently as well as help protect you from risk. Depending on where you are in the retirement saving timeline, how exactly you allocate your assets will differ and change with life events and as you get older. For example, when you are younger–when just starting out in a career and before you have a family–you may find that your appetite for risk is higher, so you allocate your assets to take advantage of Continue reading Using Asset Allocation to Your Advantage

Beware of Inflation in Retirement

I’ve talked about it in the past, but inflation is a very real thing that can and will affect your retirement savings. No, it won’t decimate your retirement savings, but it will decrease the longevity of your nest egg. If you have been working with a competent financial advisor and have done your homework, inflation is probably already a part of your retirement savings plan. However, it can be something that is overlooked when saving as it’s not always obvious unless you take a long-term view of things. There are some easy ways to protect your retirement savings from inflation. Continue reading Beware of Inflation in Retirement

Market Overview: Stocks and Bonds

Market Overview¬† Stocks   2013 was a good year for stocks with returns and below average drawdowns. Investors who hid out in gold lost 28%, while gold stocks lost a whopping 55% on average. So much for the sanctuary of precious metals.   American consumers in 2013 were more upbeat than at any time in the previous six years as views on the economy and the buying climate improved. An improved job market, higher stock prices and rising home values lifted sentiment. The good news is that unemployment continues to decline. This indicator alone tends to stimulate the economic outlook. Continue reading Market Overview: Stocks and Bonds