Liquidity
When a person has cash reserves they can take advantage of
opportunities that come along. Suppose someone has to sell their car in
a hurry and are willing to take $3,000 less that book? With cash, snap
it up and resell for a profit. Many times in a persons life they will
have opportunities to take advantage if they have cash reserves. Cash
is like King Kong!
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Exit strategy for small business owner
Many small business owners feel it is best if they put all their money
back into the business. Over the years, I see that the best decision is
to diversify into others things rather than just in one place. While a
small business may not have a lot of extra money, take a modest salary
and have a surplus to establish a SEP or and IRA. After all, if your
business can not through off at least this much money, you are not in
aa position to be a successful leader in you business, and your are not
going to set a good example for your employees.
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Savings A Bust For Boomers
Savings rate is now a negative 1% according to Commerce Dept. This is
the lowest since 1934, when during the Depression as many as one in
four were out of work. They were exhausting savings in order to pay for
rent and buy food. However in this day, we are spending all of our
money and even more than we make in order to have what we want without
restraint. The Depression generation is fast becoming non-existent, and
the lessons learned during that economic hardship long gone. Now the
Boomers are coming to retirement age but do not have enough money to
retire. What will happen? I think you know that history repeats itself
over and over.
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Huge Disagreements Among Married Baby Boomers
Baby boomers are approaching retirement. Recent survey shows that more
than 33% of husbands and wives gave completely different answers when
asked at what age they would retire. - In addition, 41% differed on
whether both or at least one will work in retirement, while 37% failed
to agree about the quality of their post-retirement lifestyle. Nor do
few Baby Boomers agree on who their financial consultant might be?
Strange.
Couples
will do much better financially if they are together on things than not
even knowing what money is available and how long it will last, and
what old spending habits might drain the nest egg much earlier than
death.
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Costs Of A Living Trust
A free will is easy to find on the internet through some search engine.
But to add a living trust, you might need an attorney. In my experience
an attorney will charge $800 to $2,400 depending how much time he needs
to take preparing it. More money will be needed if an additional entity
is needed like an limited liability company. Some attorneys have
pre-prepared standard trusts that they boiler plate them for you at
half these costs. My suggestion is to do it right and get it done. Then
make sure you review at least once a year and keep it up to date. Best
wishes.
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Benefits Of A Living Trust
A living trust with an accompanying will is helpful while living if you
become sick or disabled and need someone to look after your affairs. At
death, they help to save court costs and probate fees. In case of
creditors, they help to place road blocks in front of the creditors. My
advise is to put one in place.
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Paycheck To Paycheck
Anyone can spend money, even a 4 year old. It takes a lot of wisdom,
courage and discipline to put some surplus money away for something
more important in the future. Soon, as the reserve balance grows to
exceed your monthly spending amount, you can now be one month ahead
instead of living paycheck to paycheck.
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Definition Of Investor
An investor keeps control of his money. A saver gives money to someone
else. I feel strongly that anyone can learn how to be an investor. Most
people have a specialized area of knowledge and their day job is in
that area, thus having a tendency to believe someone else who says, "I
am a trained money management professional, so you need to give me your
money to invest." Most of these self-proclaimed professionals are not.
They may have a "license", but this is not "training".
Those
that are good at investing, got that way by trial and error. I suggest
you do the same, keep your money and establish a trial and error
journal so you can learn from your efforts.
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