High Yield Money Market Account

If you are not saving anything for the future, then you could be in for a hard road ahead. After all, if you are like most people, you do not plan on working forever. At least this is the goal of most men and women. Everyone wants to retire some day! This is why it is so important to look into methods of saving for the future. One way to go about this is with a high yield money market account. This can come in the form of a high yield savings account, as well as a Roth IRA, or other kind of independent retirement account. The key is to get started at a fairly young age, so that you do not have to worry when the time comes.

There are a few routine high yield money market accounts that everyone should look into when they get a chance. These can be found online at websites like Vanguard.com, EverBank.com, and PersonalSavings.AmericanExpress.com. It is prudent to take some time and look over these online. Especially if you are seriously interested in a high yield money market account. You see, this is where so many people lack or fail. Most people make the mistake of always spending beyond their means, and sadly never investing any money for the future. The problem with this is the debt accumulation over the years, as well as the lack of money saved for the golden years.

There is no magical bank account that randomly appears when you hit a certain age. This is why it obviously pays to be ready for the future with a high yield money market account. The older you get, the closer you are to retirement. The last thing you want to do is wait until you hit your fifties to begin saving for retirement. At this point it is very tough to do, and far too much time has passed. If you begin saving at a young age like 25, you can really be set for your retirement phase of life. In fact, with the right high yield money market account, you can have plenty of money saved by that time.

If you need assistance with a high yield money market account, then you should really try speaking with a financial advisor. This kind of consultant can provide you with plenty of tips for saving money, and investing for the future. Just do not forget about websites like Vanguard.com, PersonalSavings.AmericanExpress.com, and EverBank.com. These sites can assist you greatly with high yield money market accounts, and making the right choices to get started saving for the future.

Your 401K Plan – Can You Bank On It?

Although often touted as a retirement firewall, the 401K plan has come under recent attack by many financial pundits as a pie-in-the-sky dream, founded on a dodge, finally exposed by our financial crisis for the miserable fraud that it always was. This is alarming for the millions of baby-boomers who have been trusting in deriving at least 4 percent of their yearly retirement income from their 401Ks. Is this just more fear-mongering, or is there really something to it?

The reason for this hostility is obvious enough, according to a recent Time magazine article. Whatever money you put into your 401K ten years ago, take about 25 percent from that and that’s what your 401K is worth today. You would have done better to put your savings into a savings account (at least they’re insured), or stuff your mattress with the cash. If the 401K plan is such a disaster, why do financial planners, whose job it is to devise a portfolio of holdings that they claim will keep a retiree in the black for 30 years, still advise their clients to count on this leaking bag?

It seemed smart enough when it first came out in the early 80s. It was named after the section of the tax code that permitted it. You pay into it by automatic deductions from your pay. You never get your hands on the money, so you can’t spend it. It wasn’t as though you couldn’t drop it if you wanted. If your financial condition required it, you could suspend it any time you wanted – it was your call.

I can save my own money, you might say, but there’s more to the 401K plan than forcing discipline on you. It’s better than a savings account because your company matches what you contribute. Most employers liked it better than their pension plans, which always reduced their bottom line. Most dropped those plans and took up with the 401K system instead. Unlike company pension plans, if you left the company, the money in it was all yours. Best of all, it couldn’t be taxed. The IRS does get some in the end, a levy they call it, a tolerable percentage. Your net income doesn’t include your contributions, so you’re being taxed for less than what you actually make. It was conceived as a well paid executive’s benefit, but it quickly became available to anyone who could stand to have a meaningful amount withheld from each paycheck.

That’s not as bad as you might have first thought. Yes, the National Bureau of Economic Research predicted that an average 401K plan, over the life of a career,  would provide about 50 percent of retirement income, but the truth is that today’s retirees can expect their plan to render a mere 8 percent. The reasons for this poor return mainly falls on the participant. Most didn’t contribute enough to hold the amount needed to cover 50 percent of their retirement. Poor investments in other financial vehicles required the participants to cash in early. Other investments are critical to cover the other percentage of retirement income the plan doesn’t cover. The recent crash has wiped out many of these investments, causing the retiree to draw more from their 401K than they expected. The problem, then, is not that the 401K with employer contributions won’t result in the expected savings. The problem is that other investments may well cause you to use more of your 401K savings earlier than expected in your retirement.

Yes, the 401K plan still has the potential to support a retiree in the future, that is, if enough is contributed. Raising your contribution will at least assure you that there is more to draw on when all else fails. Other schemes are being proposed, but the 401K still has a life and can still provide the income to future retirees when they’re in their golden years.

Finding The Best Way to Invest Money

It is important to be prepared for the future. This is something many people fail to think about until they are middle-aged, or even older. The problem with this is you then have less time to invest. After all, you probably do not want to work your entire life. There is something to be said about the golden years and retirement. This brings us to the question; what is the best way to invest money? Well, this is actually a tricky question since it can have more than one answer. To give you an idea of some of the basic ways people invest money for the future, we will go over a few things like stocks, IRAs and high yield savings accounts.

The first rule of investing is knowing what you are getting into. If something looks faulty or questionable, avoid it. There are other options out there. Many experts will tell you that the best way to invest money is in a Roth IRA. This is essentially an individual retirement account. You can put however much money you want in it, and then watch it grow for as the years pass. Some companies that offer this option are eTrade, Scottrade, Vanguard, and Tradeking. It is up to you to check out the benefits and fees that apply to each one in order to find out which one is ideal for you, and the money you wish to invest for the future.

With IRAs, you can watch your money grow, because it is invested in various stocks. You can choose where you wish to invest. The more money you put into the Roth IRA, the more money you will have down the road. There are calculators to help you determine how much money you will have based on what you put in each year. As for stocks in general, it is best to consult a professional in this field first. This is especially true if you know nothing about the stock market. He/she can assist you with making wise investments and creating a good portfolio. This can be one of the best way to invest money.

Do not overlook a high-yield savings account. While some experts will tell you that a savings account is a terrible place to stick your money, there are savings accounts with high returns and interest rates. Once you find one, you can decide if it is the best way to invest money for you, or if you should place all of your extra income into an IRA or 401K plan through your workplace. Just keep in mind that a savings account allows you to pull out money at any time. If you should become unemployed and suddenly need some funds, a savings account nest egg could help you out financially. So basically the best way to invest money is by not putting all of your eggs in one basket.

Finding the Best Brokerage Firms for your Needs

If you need an experienced brokerage firm to handle your investments, are you always looking for just the generic “dependable knowledgeable guy”? Or do you try to review your specific needs and go for someone who possesses the skills you need for the plans you have with your money? Which would be the right approach? As you would guess, it’s the latter. You could look for reviews and ratings guides that describe brokerage firms, you could look at customer satisfaction polls too. These however only go so far. Sometimes, a competent broker who doesn’t specialize in anything could be a worse choice than a somewhat less dependable broker who is a specialist in your kind of plan. Choosing among the brokerage firms you have your pick of, you need to first decide what you have in mind – plans for a steady long-term commitment to saving and building, or something more short-term and more action oriented.

Before you pick up the phone and try calling around for recommendations for brokerage firms here are a few questions you need to be asking yourself first. The first is, to know how much money you have to put by in your investments. There used to be discount brokerage firms for the smalltime investor, but they are usually a bad idea, so expensive in fees and commissions are they. The second thing to ask yourself is about the kind of stocks you are interested in. Any broker will easily have access to all the top trades; if your tastes run to the exotic though, or to investments that will be hot one day but are not so right now, you’ll have no choice but to pick up one of the full-service brokerage firms. If you believe you will be making trades and swaps often, you’ll need a brokerage firm that doesn’t really connect its fees and commissions to how often you trade. And of course, if you need proper in-depth advice and discussion sessions over your investments, you have no choice but to pony up for a proper full-service brokerage firm.

Let’s say that you’re like many of us – you have no more than $5000 or thereabouts to play around with in the markets. You’ll need to look for brokerage firms that deal in small sums – there are many that won’t accept a client for less than $15,000 worth of investments. If it’s a retirement account that you’re after, their requirements may be lower. Did you ever realize that when you’re dealing in sums as small as $5000, just the brokerage fees and commissions can easily wipe out any gains you make? Even really simple actions like transferring money or shutting down your account could attract fees, and there are activity fees to think of too. If you find all of this very intimidating, consider dividend reinvestment plans or DRIPs –  the price of admission is just $10 a month. The idea is to build your capital up to play in slightly bigger leagues so that you can take advantage of better investment opportunities.

When you get there, in the beginning, it’s best to be a steady buy-and-hold investor. You don’t want to do anything more than a little maintenance work on your portfolio each year – you’ll make sure that there are no under-performers, and you’ll keep your eye out for some really good trades; but apart from that, leaving your investments alone is a really good idea for someone who has just stepped up from the little leagues. But if you really are looking for an active investment plan buying and selling left and right, and you need a lot of initial assistance from your broker to learn the ropes, you’ll need to look among brokerage firms that offer the full package, or offer financial planning services. When you need a lot of handholding, you’ll want to look around not by the name of the firm; you care about the specific broker who works at the firm – someone you can work with. You’ll need to pick the person over the firm. Of course, that will cost you; which is the reason why the buy-and-hold plan is best until you really step up into the big leagues.

Beginning Investing – What You Need To Know About The Game

Maybe it isn’t your idea of fun; but investing, sure is mine. When I  survey my little financial empire with stocks here and investments there, it gives me a sense of empowerment; I need to keep changing things, tearing down and rebuilding, looking for ways to learn. My idea of a great time shopping would be to weigh and size up the various investment options out there, and getting my investment instincts a good workout. When I see my predictions play out as I plan, it gives me a thrill; when they totter and fail, I want to sit down and study things deeply to see where my experiments went wrong. If that takes me out of the running for any kind of hipness, there are other things that go with my part too – glasses and my tendency to quote Freud. But I don’t care, because investing is so much fun. But guess what, there is then a survey that finds that of all people under 25, one out of three feels the way I do. Maybe I’m younger than I thought I was. To anyone beginning investing as a fun hobby, now is a great time to be alive.

What is not fun in playing the markets? Beginning investing at my mother’s insistence, I thought I’d start out at 22 with a 401(k). Investing really didn’t grab me at the time, and I decided to put everything in a treasury bond mutual fund. I didn’t really look at it for another year; in the end, I found it made barely anything more than 1% every quarter. I was dismayed; even if I wasn’t interested in it, I did want to do well, whatever I did. I found a nice financial magazine that had a Cosmo style quiz about how to find out where my investing soul lay. At the end of the quiz, I thought I knew what to do; I picked up a list of possible fund options, and before I knew it, I was making 6% a quarter. So when I tell you something about what I learned in my years beginning investing, it is so that you can have as much fun as I did.

The first thing you need to do before you decide on your investing plan is to find out how much you can scrape together to use as your investing capital. Before indulging in the luxury of investing, your first order of of business should be mustering all your resources to set up enough of an emergency fund to see you through at least six months of no income. You need to first set aside enough for all your monthly expenses and an emergency fund before you’ll be able to find out how much money you can set aside each month to engage your inner Gordon Gekko to make a beginning investing.

Of course, you won’t have that much at first; but you need to do it right. Your next step is to find out how much you can afford to lose – your tolerance to risk.  The longer the period of time you give yourself to see the returns you expect, the higher your tolerance for risk. For instance, if your plan involves having your investments gain a certain amount by the end of the year, that’s not a lot of time to recover from any losses you might make on the way. For this reason, you have to play very safe. The longer the period of time you give yourself to make your goal, the more risky your investments can be, and therefore the more rewarding.

Once you have all the preliminaries in place, you can start actually seeing your portfolio take shape. Do you need to choose stocks or bonds; should they be large caps or small caps; how about foreign companies versus homegrown? It would be a good thing to diversify. If your plan involves waiting 10 years to see your plans come to fruition, stocks can’t be beat. Large companies over the last 50 years for instance, have gained 10% annualized. Small companies have risen even higher than that. On average, you should be able to get 8%, planning conservatively. It wouldn’t be a bad thing if you went all out on the stocks and ignored the bonds altogether if you had years over which to wait and watch. But if you’re feeling adventurous, experts believe that it wouldn’t be a bad idea if you mixed in perhaps 25% in alternatives like bonds or commodities.

Of course when you’re beginning investing, you can’t go out and pick your stocks yourself; your best bet would be to go with mutual funds that deal in stocks or commodities as you choose. Look for mutual funds that have a great strong management team. For the long-term right now, Vanguard and T. Rowe happened to be great picks. If you start with a 401(k), that should set you up on the right path; and taking an employer-sponsored account would keep your choices of stock picks to a minimum, and simplify your life. You need to keep monitoring how your investments are doing; try the instant X-ray tool on MorningStar.com. To anyone beginning investing, it’s tempting to be hypersensitive to every movement in stock prices. You could easily wipe out your earnings that way though, paying fees for each investment shift you make. Invest wisely, and be patient then; you should see your hard work pay off.