Net Worth TV Reviews How Investing Strategies Change at Various Employment Stages
As life changes, so does all the different goals, including money. When you are young, you are usually much freer when it comes to money. And then comes the phase in life when you are starting a family. After that you are watching your kids grow up, approaching retirement, and then finally enjoying retirement. Along with all those lifestyle changes, so does money management and investing changes.
Net Worth TV with Terry Bradshaw reviews how different people look at money at different stages in their lives. This is important, because the money situations at each stage really are different, and you can’t just put a single template over someone’s entire financial life. Here are some key things to consider at each stage when it comes to investing.
Just Starting Out
When you are just starting out, you are basically in your accrual phase of life. The goal should be to bring in as much money possible and save as well. This second part is challenging, as many people in this phase also tend to spend.
In this phase, your investment strategy should match your growth strategy. It is a good idea to look into more risky investments, like stocks, so that you can get good compound growth over time. You should also look into maximizing your retirement accounts, like 401ks and IRAs, since you may be limited by income on these accounts in later life.
Starting a Family and Mid Management
As you start your family, your money priorities do change a little bit. You will probably be making a little more at this point in your life, but you will also probably be spending a bit more on family related expenses (kid’s aren’t cheap!). As you move into this phase of life, you should consider setting up a solid budget that includes setting aside money into savings.
For investments, Net Worth TV reviews how you still need to be aggressive, but also start balancing out your portfolio with some more conservative investments like bonds. While you still have time to save, your expenses will prohibit as much accumulation as you would have had earlier in life.
Upper Management and Approaching Retirement
Hopefully, at this phase in your life, you may be moving into upper management and starting to think about retirement. These are your peak earning years, and hopefully as your children move out, you will start to have fewer expenses as well. Really focus on saving during these years. You may have the ability, once you reach a certain age, to even contribute more to your 401k and IRA via catch-up contributions. These extra contributions can really give a boost to your portfolio’s value.
You should also be shifting into more capital-preservation type assets, because you don’t want to lose any money as you approach retirement. This will lower the growth of your portfolio, but it will allow you to have more capital preserved should their be turbulence in the markets.
Moving to Self-Employment
At this point in your life, Net Worth TV Show highlights that many individuals consider moving to self-employment or consulting type work. This can be a great transition before retirement – you still have some income coming in, and you have things to do, but it doesn’t have to be full time work.
Another great perk about self-employment is that there are a wide variety of savings and retirement tools available to you that can help you meet your needs. You should still maintain a conservative portfolio, but you should add to it as much as possible.
Net Worth TV on Retirement Planning
Finally, you are in retirement and will need to start using the money you’ve accrued your whole life to live off of. Many people try to do this by living off the interest of the money they’ve saved.
This can be the safest way to live, since you never touch the principal. Other people choose to roll their savings into an annuity, which pays you a set amount each month so you can live. This is an easier way to setup retirement, but annuities can have a lot of fees that should be researched appropriately.