Here are some financial truths to keep top of mind as you ring in the new year...
- Never try to reach a goal by extending your portfolio risk beyond your ability to handle that risk in a down market. It may cause you to do harmful things.
- To reach goals most effectively and efficiently, plan and get professional help.
- Cash Flow is king; understand where you are spending your money. Hold yourself accountable.
- When times are tough, you can cut back on discretionary expenses but not fixed expenses like a mortgage. Be judicious in how you allocate financial resources to things you cannot change.
- Pay off credit card balances each month. Pay off credit card balances each month!... Worth saying twice.
- Save 10 – 20% of your income each month. Always.
- Max out tax-advantaged investments like 401(k)s, Roths, 529s and HSAs.
- Make sure you are protected for life’s greatest risks – death, disability, medical… (use insurance). Unless of course you’re filthy rich, then don’t even bother reading this.
- Set aside 3 – 6 months of expenses in cash vehicles for emergencies or unplanned events/opportunities.
- Strive to reduce fees on your investments. Do not do so at the expense of returns.
Make it a great 2019!