employee incentives and life insurance proceeds may serve to address family needs . These funds , however , must be properly set up . The individual ’ s will , private asset titling and inheritance provisions should be evaluated to ascertain that family needs fall within the available amount of funds and that such funds are made available when needed .‖
Tip # 4 – Opt for Long-Term Investment
― Investing is a marathon , not a sprint . Build an investment plan and let the market take care of itself ; as long as you stick with your plan , you will reach your goal . Historical figures from way back in 1926 to the present show that a diversified portfolio of big capitalization stocks earned an average of 10 %, compounded annually . Government and corporate bonds have given about 6 %. Woody Allen famously said that 80 % of success is showing up . To succeed likewise in stock investment requires showing up and persevering with your original long-term goals .‖
Tip # 5 – Capital Ownership is Crucial
― Aim for capital ownership . Until you choose to be taxed , appreciation is not taxed . You have control of the situation . Aside from that , your income is preferentially taxed at rates that apply for long-term capital gains . Moreover , the income from capital qualified dividends and long-term capital gains are likewise taxed preferentially . When you can already afford to be remunerated with stock instead of plain income , you stand to get more long-term benefits . Generally , what matters is not the amount paid on your investment but how you are paid .‖
Tip # 6 – Take Control of Your Debt
― Only by having an effective debt management strategy can you ultimately cut the vicious cycle of indebtedness and release your potential for building wealth . An effective debt management requires prudently prioritizing your most expensive debt first , such as credit card statements , then personal debts , then deal with education loans and , next , housing loans . Nevertheless , managing debt equally involves staying away from getting another loan and finding ways to reduce spending or , at least , spending more wisely . For example , you will be surprised at how much you will save if you purchased a coffee machine instead of buying coffee daily .‖
Tip # 7 – Discuss Money Maters with People Close to You
― Usually , people keep their loved ones in the dark regarding their financial situation , producing stress in their relationships . Dealing with financial issues and aspirations together with your partner will bring so many benefits . Spend time to formulate a common vision of what you want to achieve in the future . For parents , invest time to educate your children about handling money . Whether we teach them directly or not , children eventually pick up attitudes regarding the value of money . Hence , be careful how you talk to your children regarding money . Even a little pep talk will do a great deal toward teaching them good money values .‖
Tip # 8 – Evaluate Insurance Coverages
― Regularly check the coverages in your insurance policy to make sure that they remain consistent with your original goals and purposes . Include all your policies , such as health insurance , life insurance , car insurance , disability insurance and home mortgage insurance . Also consider getting some additional coverage through an umbrella policy . Although insurance may not be as exciting a subject as other financial assets , it can be a valuable tool for preparing for a secure future . With respect to life insurance , always update your designated beneficiaries and values of coverage during important life events .‖