Securing Your Financial Future: Complete Personal Finance for Beginners

Securing Your Financial Future: Complete Personal Finance for Beginners

Chris Smith

Language: English

Pages: 340

ISBN: 1442214228

Format: PDF / Kindle (mobi) / ePub

When it comes to personal finance, the rules may have changed, but the time-tested principles of sound personal financial management haven't. Those starting out on their paths to financial security just need to learn them better and apply them earlier than ever before - ideally, right from the start.

Previous generations have had some help in achieving financial security that young people can't count on today: generous employer pensions, steady housing price increases, and a well-funded Social Security program, to name a few. In short, the old "muddle through" approach won't cut it anymore - not even close. A steady income is still a must, but parlaying this into long-term financial security is now an entirely different proposition than ever before. The institutions of the past can no longer be relied upon to handle the process; each person now needs to manage the long-term financial planning and decision making on their own.

Fortunately, though, anyone just starting out can still achieve a very strong financial future from almost any income level - but only by doing the right things to make it happen. Those things aren't particularly hard to understand or to do, but it is important to do them right, to do them consistently, and to do them in the right order. Most importantly, if you get an early start, the risks are minimal and the payoff is substantial. But each year that passes, the risks go up and the payoff goes down. If you have just started out in your financial life, or if you are just about to, and you want a complete and practical education in the fundamentals of personal finance for a secure future, then this book is for you. Chris Smith guides readers through the basics of saving, investing, and financial planning in language that is clear, accessible, and lively, making difficult concepts understandable to the novice, and enjoyable to those who already have some understanding. He shows readers how to apply this knowledge, and to avoid the most common pitfalls, to insure the best possible outcome for long-term financial security.
















The workers on the 80th floor see him go by and notice that he’s smiling! Astonished, one of them calls a friend on the 70th floor and says, “Ask him why he’s smiling.” So the fast-moving friend hurries to the window and calls out, “Why are you smiling?” as the man falls by. People on the 60th floor hear the man yell, “Because this is fun!” On the 50th floor, workers hear him call out, “The view is great!” The 40th-floor people hear, “And the best part is . . . ,” while those on the 30th hear him

they can invest in funds. Funds can be actively managed (which means that their goal is to beat a particular index) or passively managed (their goal is to match an index). These passively managed funds are often called index funds. The actively managed funds generally don’t consistently beat their targeted index, but index funds virtually always match it. Frictional costs directly associated with funds include loads (one-time sales commissions) and expense ratios (ongoing fees paid each

deduction allows you to save taxes in the year that you invest, and the whole idea of this tax shield is for you to take those saved taxes and reinvest them on top of your other investments. These on-top investments, which are then compounded over a long period of time right along with your original investment, are what make tax-deferred investing so much better than unshielded investing. This requirement is vitally important for you to understand. In order for you to get the value of this

discussion, they agreed to meet in exactly 40 years, at the very same spot, to compare their experiences. As an incentive, they decided that whoever was most disappointed in her strategy would be the one who had learned the most valuable lessons, and therefore should be the commencement speaker for that year’s graduates. Since none of them relished the idea of publicly sharing why their strategy was so disappointing, they all left that day firmly resolved to follow their respective plans to the

good as it ever gets. What if you’re not so lucky in your timing and the best interest rate that you can get is more in the midpoint of the range, at 10%. In that case, you’ll end up paying your principal back well over three times over the full term of your mortgage! What about the top of the range, at 15% interest? You’ll pay your mortgage back over four and a half times! So to answer the question directly: interest rates matter a lot. But your P&I mortgage payments aren’t the only monthly

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