Creating an effective financial savings plan depends on an individual’s goals and aspirations. To be sure, a sound financial plan should always include savings for retirement. At the same time, however, nearly every household has more immediate financial needs that require pre-planning and investment.
Short-term financial goals include such expenditures as a family vacation, wedding, or other one-time big-ticket expenses. The best option in such cases is place cash in a bank account or CD. This allows the saver to earn a little bit of interest while having access to the funds when needed.
Financial planning for five years or more in the future requires a more sophisticated approach to savings and investment. Longer-term investments should be geared toward stocks, bonds, mutual funds, real state, and foreign investment. Though more risky than savings accounts or CDs, returns over time tend to work in favor of the investor.
When it comes to retirement planning, financial planners recommend putting some portion of assets in higher-risk investments. Over time, the return will help investors stay ahead of inflation while creating a larger nest egg.
About Frank LaRosa:
As President of Elite Recruiting and Consulting, Frank LaRosa focuses on placing financial advisors, managers, and trainees with financial services firms throughout the United States.