The new year began with some political drama, as last-minute negotiations attempted to avert sending the nation over the "fiscal cliff." Technically, we actually did go over the cliff, however briefly, as a host of tax provisions and automatic spending cuts took effect at the stroke of midnight on December 31, 2012. However, January 1, 2013, saw legislation--retroactively effective--pass the U.S. Senate, and then later the House of Representatives. The American Taxpayer Relief Act of 2012 (ATRA) permanently extends a number of major tax provisions and temporarily extends many others. Here are the basics.
Contribution, tax and other numbers to help you plan in 2013.
Managing investment risk is the most important factor in developing your portfolio. Projected or expected returns are meaningless if not viewed through the lens of potential risks.
Managing investment risk involves several steps:
• Identifying your Risk Profile
• Identifying investment risks
• Matching your investment portfolio risks to your Risk Profile
• Monitoring and adjusting your portfolio to match changes in your Risk Profile, goals and time horizons.
Before you file that copy of your tax form in the back of the drawer, spend a few minutes to see what it can tell you about your finances. You can quickly see how much you are spending, paying in taxes and saving for the future. This is valuable information to see if you are moving closer to your future financial goals. Here is how to do it...
"Financial planning is investing"
Although investing is one component of good financial planning, it is not all about investing. Financial planning includes spending & saving (budgeting), risks management, investing, insurance, estate planning and more. While you might not need to get involved with these topics at each point in your life, most people encounter them at some point. Early in life, managing your cash flow to create savings is critical. Without savings, there is nothing to invest. Likewise, managing risk to avoid catastrophic losses will help you retain what your investments have grown. Looking at all parts will help you develop a successful plan.
The MF Global incident is another reminder of what can go wrong with your investment holdings. How can you avoid losing control of your investments?
People who are concerned about outliving their assets...
What is your "Number" and how you will manage it?
How much do I need to be able to retire comfortably?
I'm retired - What is the best way to obtain the income I need from my assets?
A multi-Billion dollar Ponzi scheme based in New York - No surprise; there are lots of questionable financial whizzes on Wall Street.
$350 Million lost to an investment firm in Sarasota - Now that is news! How soon we forget that some advisors, even those close to home, may not be good for our financial health. Remember 2007 when Capital 1st Financial was found to be defrauding seniors? Or some recent real estate investments?
It is January. After another tumultuous year, we have a fresh start on the calendar and for many a desire to improve their financial security.
People who thought they were doing the right things, investing conservatively and living within their means, found they are paying for the sins of others. The price of gasoline hit all time highs and then plummeted to less than half within six months. If we didn't believe we were tied together economically, last year erased any doubt. We also found that many we trusted with our money were not so concerned with our well-being. It proved a difficult year in which to protect our loved ones.
Ask 10 people what a financial planner does and you're likely to get 10 different answers.
The trouble is, all of the answers may be correct, depending on the financial planner. I'm not going to attempt to answer the question for other financial planners. I'm going to tell you what Tom Roberts does at A New Approach Financial Planning.
First, I'm not in competition with the financial planners or advisors that only accept high net worth clients. Many planners will only accept clients if they have a minimum level of investable assets or income. I'm after the everyday, middle income person or family that may have a large amount to invest or nothing to invest.
Personal Finance Workbook for Dummies by Sheryl Garrett
The Richest Man in Babylon by George S. Clason
Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence by Joe Dominguez & Vicki Robin