Retirement Planning: 3 Investing Tips From a Financial Advisor

Retirement Planning: 3 Investing Tips From a Financial Advisor
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Understand the What, Why, and Where of investing BEFORE you put your money to work.

Investing is NOT the same as savings.

Savings is accumulating more money than you can spend. Income greater than Expenses.

Investing is putting your money to work so that it grows at a pace at least faster than inflation (that is the goal).

Investing involves risk - it's a tradeoff between security and stability but LOW rates of return. Versus more volatility and instability in return for higher rates of return.

Different investment types afford different levels of risk.

In addition you need to consider the time frame you are under - if the time frame is short, you will likely not want to take as much risk. If the time frame is longer, you may be willing to consider greater amounts of risk.

Cash or CD's are low risk examples.

Moderate risk examples might be Bonds or government debt

Higher risk examples might be stocks, mutual funds, exchange traded funds.

Investments can take place in general purpose brokerage accounts, college savings accounts, or retirement accounts, among many other places.

General purpose account examples might be Taxable Brokerage accounts, joint tenant accounts, c-corp or s-corp accounts.

College savings accounts could be 529 accounts, coverdell ESA accounts.

Retirement accounts are typically IRA's, 401ks, 403b's, 457s.

As you think about where to invest, the most important thing to consider is your specific plan.

Use these four steps when considering:

1) Solidify your goals

2) Know what's needed

3) Weigh the alternatives

4) Pick a path but be adaptable

00:52 What Is Investing
5:52 Why Invest
7:27 Where to Invest