In honor of Financial Literacy month, I asked our terrific staff for their top money tips - their "greatest hits". I hope their thoughts will inspire you!
Liz Xilas — It's not about how much you earn, it's how much you save. Someone who makes $1 million dollars but spends it all will be less likely to meet their goals then someone who makes $100,000 and saves 5%. The earlier you start saving the most you can, the better off you will be in the long run.
Karen Asbra – Consider opportunity cost. As Shari says, “you can have anything, not everything.” Make choices about where you spend that align with your values, and then don’t feel guilty! Money is a tool. Use it to build your best life.
Ben Richter — Don’t try to time the market. As Dimensional’s David Booth says, “Do you really want to invest your hard-earned savings — the money you’ll need for your kids’ college or your own retirement — based on a hunch or wish? The good news is you can have a good experience without having to do any forecasting — I believe you just need to be a long-term investor with a truly diversified portfolio.”
Conner Grzenia — Download a free budgeting app like Mint. It can help you see where you are sending your money and keep track of your investments. Check in at least monthly. Once you are up and running, categorize each expense into one of the following “buckets” — Needs, Savings or Wants. As a guideline, check your spending against the 50/20/30 rule.
Kristyn Gibson — Understand your investments and the risks they carry. What goes up 50% can go down just as much or more! Remember, the chances of outperforming the market are slim. We want to put the odds in our clients' favor. That's why we utilize funds that closely track the market's returns instead of trying to predict which stocks might do better.
John Frederick — Make your savings automatic, whether it’s for an emergency fund or IRA or anything else. It's easy to link your checking account to an investment account, and set up a regular transfer. When it’s automatic you don’t have to worry about it!
Rhea Ravindran — Live within your means. Spend less than you have coming in. Do this and everything else will fall into place. If you live beyond your means you will face stress and anxiety. Your flexibility to make life and career decisions will be limited. You will be weighed down by trying to finance a lifestyle that you cannot afford.
Terri Velgara — Start saving early. Even a little bit saved each month will make a big difference over the years ahead. Strive to save 10 - 15% of your income for retirement. Don't forget that your employer's match of your 401(k) contributions count. If you save 5% of your income and your boss matches another 5%, that's a 10% savings rate, and a great start!
Stephen Reiches — Review your estate plan on a regular basis. Life events such as a divorce, a child's marriage, or new additions to the family often change your goals. Just like you have a regular medical checkup, do the same for your estate plan.
David Rappaport — Focus on what you can control. While you cannot control the market’s path, you can control how you react. Market downturns may be disappointing, but over the long-term, stocks have generated strong returns. If your goals haven’t changed, your investment approach should not either.
All such good advice! Here's my "greatest hit": Get your financial life organized. Here's our Just In Case form to get you started.
Shari Greco Reiches
Shari co-founded Rappaport Reiches Capital Management with one goal - to maximize the return on life for her clients. Please connect with Shari below. She loves to talk about investing, financial planning, and Barry Manilow.