How to Achieve a Healthy, Wealthy and Wise Financial Portfolio

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( — October 23, 2018) — Do you make good money but feel you’re not really getting anywhere? If we are not careful and diligent in managing the financial aspects of our lives, we can easily slip into a year-to-year treadmill lifestyle. Nobody wants that because we were put here to thrive and prosper, right? Your financial health is just as important as your physical health. Is your financial situation in need of a checkup? If reading the previous sentence causes even a momentary hesitation, please read on.

Talking to Smart Friends

You have a nice career and you have been socking away sums of cash on a consistent basis. Congratulations. Just like eating a healthy bowl of oatmeal for breakfast, this one should be foremost, moreover, let’s add a dollop of butter, a little cinnamon, raisins and more, shall we?

All of us have at least one friend who is wickedly-smart about most things. You know the gal, she may not be the life of the party or belle-of-the-ball, but she does know a heck of a lot more than most. You could ask her what she thought about particular stocks, and she would rattle off its p/e ratio, book value, as well as it’s recent closing price.

Here’s How to Get Back On a Track of Financial Wellness

1) Stocks. Stocks should be a major part of your asset allocation. You select a portfolio of growth stocks. As the company grows and creates new products and services, so will their stock price, and so will the value of your portfolio. Many stocks even issue dividends, which makes stock market investing even more attractive.

2) Bonds. You should have bonds in your portfolio. While the returns can be modest, they will not cause you to lose sleep at night. If your tolerance level is a bit higher than most, you could select high-yield or junk bonds, but just know that these types of bonds carry higher levels of risk.

3) Cash (or vehicles that can quickly be turned into cash). Cash and their equivalents: your savings, certificates of deposits, and money market funds should be another asset class in your portfolio. While their value can erode over time, they should be included because you can tap these in emergency situations.

Don’t put all of your eggs in one basket. You’ve heard this expression your whole life, and you know what it means. In a word, it means balance. You want to have a good mix of a lot of different asset classes, based on several variables, such as your goals, investment time horizon, risk tolerance and cash available. You could visit your favorite websites for investment research or consulting a good financial planner can help you with this.

Doing The Boring Things (will keep you financially healthy)

Remember when your grandmother had you lean back and accept cod liver oil — because it would make you well? This is analogous to doing the right thing when it’s time to get our financial house in order. You might think of this as, “the boring parts.”

  • Spend less than you earn

  • Eliminate credit card debt

  • Pay all bills on time

  • Create an emergency fund (and don’t touch it unless there is one)

  • Maintain a high FICO score

  • Invest in income-producing real estate

You can do this. You just have to get started. The amazing thing about investing is once you began to accumulate some knowledge you will meet others who are on the same track. Before you know it, you will be seen as the go-to guy/gal for all of those investor neophytes who will come behind you.

When they corner you at a party, all google-eyed and curious — because they’ve heard you are the person to talk to about stock market investing — just smile calmly, in a this is what you need to do fashion. Pass on your hard-won knowledge, or send them to one of your frequently visited websites for investment research.