You can find thousands of ideas on Google how to make money fast, how to become rich without leaving your home just to name a few. We believe that most people should practice solid financial behavior to accumulate and preserve wealth. Yes, this sounds simple, but it actually works!
Keep a healthy financial life style by living within your means (i.e., get into the habit of saving a bit every month), by maximizing tax "gifts" uncle Sam gives you (e.g., deferring tax payments by saving money inside 401k plans for example), by controlling your spending (i.e, keeping zero credit card debt), and by carefully leveraging your financial assets (i.e., buy the right size house for your budget). Click here to read more about good, ongoing financial habits.
The second most important advice is to have a plan. Several levers that help you grow your wealth include savings (as discussed above), increasing your income level (e.g., promotion, changing jobs, adding a part time job), growing your investments (i.e., find the right asset allocation for you and make your portfolio grow), and allowing for real estate appreciation over time (you must own a home to benefit from this lever). Click here to review an example of a comprehensive plan that begins with a 5 year summary wealth accumulation plan.
For some people decision making is an easy task where others find it difficult. Generally speaking, personal financial decisions are not easy. There are so many financial decisions we make, some are as small as buying a cup of coffee at a coffee shop or having it at home or in the office. Other can be as significant as taking a job offer or buying a home, to name a few. And, of course, all of us need to decide what investments (stocks, bonds, CDs, etc.,) to buy/hold/sell and where (banking account, brokerage account, retirement plan).
Two basic tips can help us with making these financial decisions. The first is adopting proper financial habits. Similar to proper health habits, practice proves that adopting proper financial behavior is critical to building wealth in the long-term and dealing with financial decisions and emergencies if required.
The second is having a financial plan. The plan can serve as a guide and assist in taking the bigger decisions. People at different situations need to make different decisions. That's why the plan must be very specific to your situation, constraints and abilities. There is an old say that "to convert dreams into reality you need a plan" and another one that reflects reality – "people don’t plan to fail, they just fail to plan”.
A Bond Ladder refers to a series of bonds which are bought with sequential maturities, so that a bond matures every year. In designing portfolios for clients approaching retirement, the most important thing is to make sure they will not run out of money. So we have to determine how much they need to live on per year, and how much of this will come from pensions and Social Security. The rest can be guaranteed by using a Bond Ledder as part of a diversified portfolio.
Most people should build their bond ladder inside an IRA account. There is an exception to this recommendation if you are a federal employee and your Qualified Retirement Plan is the federal Thrift Savings Plan (TSP). The “G” fund is an alternative to a bond ladder of Treasury strips owned inside an IRA.
Click here to read more about Bond Ladders.