Long Term Planning

Planning and timing your investments to fit your goals

This is a great debt free article that gets into how you can find new ways to invest your hard earned money in order to meet your new financial goals after you are doing well with your debt recovery situation and are now debt free. Even if you have always been on track and doing well with your finances, this debt free article will point out the next level in investing by pointing out your options for your financial future.

Maybe you already have some investments and you are thinking about whether or not they are the rights investments for you. First, you will have to come to terms with your choices. As to start to move beyond basic bank accounts, you will look at bonds and stocks, both of which might be purchased as mutual funds rather than individual bands or shares of stock. Mutual funds are just a way to package stocks and bonds for easier purchase.

There is no one best investment. Many things depend on whet you are saving for and when you plan to use the money. You must figure whether this will be your emergency fund, if it is your down payment for a home down the line, or will it be untouched for several years or until your children need it for tuition. Maybe it will be for your retirement in 20 years. Whatever the case, you must understand your plans for the specific investments in order for them to perform as you like.

It really is important to match your investments with the time frame of your personal goals. You need to break down your goals into amounts you will need in the next 3 years, amounts you will need in 3-10 years, and those that go beyond 10 years. AT this stage in your financial development, you have gotten out of debt and now you want to stay out of debt, you don’t want to invest only to find yourself immediately caught short.

Money you will need within 3 years should be easy to access in bank CDs, money market mutual funds, or high quality bonds that will mature before the targeted date. If you are planning to purchase a house in 2 or 3 years, then you will need the money available to you in 2 years. Having all the investments locked up and out of your reach for 3 years may be a problem if you find the perfect house at the very beginning of your search. So you need the money available at the time you start looking for your new house just in case.

Money not needed at all for 10 years can be invested mostly in stocks or stock mutual funds. But, even the most aggressive investor wants to keep at least 10-20% in bonds, real estate, or bank accounts as a hedge against a huge stock market plunge. Here is a great way of thinking for this– divide your age by 2 and put that percentage into bonds, money market accounts, and other fixed income investments. So, if are reading this debt free article as a 40 year old, you might have 20% of your long term investments in bonds. If you are 60 years old, you should have 30% in bonds.

We hope this article was helpful in giving a much needed outlook on log term investing and how to time your investments to fit onto your personal financial goals. Take this article to heart and consider investing the very best way to secure your future.

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