Key Concepts to Investing Success

From short to long term goals, it’s important to have a recipe for success in place when it comes to planning for retirement, college, or whatever else your financial goals may be. Doesn’t really matter what your salary is. You can make an investment plan that gels with your income; however, you need to create a plan and stick to it.

Get into a habit:Regardless of the amount of money you can set aside, it’s more important to make a habit out of saving than anything else. Put it where it can do the most good for you. You can put $5,000 in a savings account to earn 2.16% interest, which can grow 20 years later to about $7,666. That’s great, but if you can do better, go for it. Another good idea is to start small and gradually increase how much you sock away every month. Add $50 a month for five years to your savings account, make it $100 a month for the next five years, and so on. By the end of 20 years, you can have $87,600, points out Kiplinger.

Set clear goals: You’ll have much more success when you set specific goals for retirement. Instead of having a generic goal of having a comfortable retirement, come up with a more exciting goal, such as “$500,000 net worth by the time I’m 60” or “an investment plan that will give me $2,000 a month to enhance my pension and social security.” Aren’t those easier and more motivating to follow? We think so.

Be smart about short-term goals: It’s wise to refrain from putting any money into the stock market that you will need in the next two to three years. If you plan on saving for a European vacation next year or your son is going off to college in two years, keep those funds liquid in a CD or savings account. While stocks can pay off big over the longer term, you really can’t time the market and be sure you can cash out at a profit when you want to.

Think long term:For long-term goals like college for your young children or your own retirement, it’s more feasible to take on more risk. This gives you many possibilities, such as stocks, corporate and government bonds, and long-term CDs. You can also look into tax-sheltered plans like IRAs and 529 college-savings plans. Don’t discount the value of financial assets such as home equity, pension plans and social security. If you trust a stock broker with your investments, do your own research into each and every transaction, and take all suggestions at face value. Don’t blindly accept recommendations without looking into them first. Read all statements carefully and take charge of your own investments. Have a stockbroker fraud attorney handy in case you feel you have been deliberately misled by your broker.

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