Personal Financial Strategy: The Big 3

3.jpg

Keeping things simple is often best in many areas of life. This applies to personal finance too. Following a few key principles stacks the odds in the practitioners favor. These the most important:

  1. Always save 10% of your income.  Always. No excuses. If you make only one hundred dollars in some difficult month, save ten of them. Work to improve this toward 25% over time by saving one half of any raise you get. Feel free to enjoy the rest.
  2. Spend as little as possible on houses and vehicles. This is generally true, but is especially important rising interest rates. Lifestyle expenses expand to fit increased income. Often houses and vehicles lead the way.
  3. When you retire, don't withdraw more than 4% of your portfolio value in any year. Shoot for 3% if possible, but never go over 4%. Find a way. Making a few cuts early means you don't have to make big cuts later.

Success doesn't require perfection, just consistent focus on the right principles.

(Additional investment specific commentary follows for client subscribers)

SVANE CAPITAL, LLC IS A REGISTERED INVESTMENT ADVISOR.  INFORMATION PRESENTED IS FOR INFORMATIONAL AND EDUCATIONAL PURPOSES ONLY AND DOES NOT INTEND TO MAKE AN OFFER OR SOLICITATION FOR THE SALE OR PURCHASE OF ANY SPECIFIC SECURITIES, INVESTMENTS, OR INVESTMENT STRATEGIES. INVESTMENTS INVOLVE RISK AND UNLESS OTHERWISE STATED, ARE NOT GUARANTEED. INTERNATIONAL INVESTING INVOLVES SPECIAL RISKS INCLUDING THE POSSIBILITY OF SUBSTANTIAL VOLATILITY DUE TO CURRENCY FLUCTUATIONS AND POLITICAL UNCERTAINTIES. AN INVESTMENT CONCENTRATED IN SECTORS AND INDUSTRIES MAY INVOLVE GREATER RISK THAN A MORE DIVERSIFIED INVESTMENT. THERE IS NO ASSURANCE THAT A DIVERSIFIED PORTFOLIO WILL PRODUCE BETTER RETURNS THAN AN UNDIVERSIFIED PORTFOLIO, NOR DOES DIVERSIFICATION ASSURE AGAINST MARKET LOSS.  ANY GRAPH PRESENTED CANNOT IN AND OF ITSELF BE USED AS THE SOLE DETERMINANT IN MAKING AN INVESTMENT DECISION. GRAPHS ARE HISTORICAL DEPICTIONS AND HAVE INHERENT LIMITATIONS IN MAKING INVESTMENT DECISIONS AND CANNOT PREDICT THE FUTURE RESULTS OF ANY INVESTMENT. PAST PERFORMANCE IS NOT AN INDICATION OF FUTURE PERFORMANCE. BE SURE TO FIRST CONSULT WITH A QUALIFIED FINANCIAL ADVISER AND/OR TAX PROFESSIONAL BEFORE IMPLEMENTING ANY STRATEGY DISCUSSED HEREIN.