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Diversification is a buzzword that gets thrown around a lot in the finance world. But does everyone really know what diversification is?
I think most probably know the high-level definition: diversification is not putting all your eggs in one basket. It is spreading out your investments across different investment vehicles so that if one part of your portfolio goes down, hopefully, others can cover it.
[Read more…] about What is Diversification?This is part two of a two part series on 401(k)s: determining if you should invest in company stock in your 401(k).
If you missed part one, you can find it here. We highlight the five things you should do before maxing out your 401(k).
Maybe we’ll do a part three. Not sure yet… If you have any ideas or questions or 401(k)s then let me know!
Anyway, to the topic at hand.
[Read more…] about Should You Invest in Company Stock in Your 401(k)?If you can max out your 401(k) you definitely should, right?
Not always. There are a few things (five, to be specific) you should consider before doing so, and we’ll walk through exactly what they are in the article below.
But first, we’ll highlight what a 401(k) is for those not 100% familiar with this amazing retirement tool.
[Read more…] about When (and When Not) to Max Out Your 401(k)Forbes calculates the personal net worth of the richest businesspeople, celebrities, and athletes for us to clamor over, but few of us actually know how to calculate our own net worth.
That’s a problem for anyone trying to get a grip on their personal finances.
Net worth is arguably the most important financial metric for you to measure every month (or quarter). It’s your financial pulse – it gives a glimpse into how healthy your financial situation is at any given time (and over time).
[Read more…] about How to Calculate Net WorthA 3 Fund Portfolio is a type of lazy portfolio that contains only three investments.
It’s called “lazy” because of how simple it is to set up and manage. Though, for once in your life, investing with a lazy portfolio is a situation where being lazy can pay off.
A 3 Fund Portfolio historically has a higher probability of providing superior growth and returns compared to actively managed portfolios. This is because actively managed mutual funds have a tendency to underperform the market, while a lazy portfolio simply attempts to match market returns while keeping costs low.
And as we know, a basic index investing approach that matches the market performance through a diversified portfolio is a winning strategy over the long term.
The added beauty of the Three Fund Portfolio is its simplicity – it’s easy to set up and manage. Anyone can do it on their own.
[Read more…] about 3 Fund Portfolio: The Lazy Way to Invest