Top 10 Mistakes People Make Regarding Their Income Strategy
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1. They don't have an income spent decades in the strategy. This is certainly workforce, investing and saving mistake number one. Not having an so you’ll have money to live on income strategy places you at once you retire. So, what’s next? risk for running out of money How do you plan to go about once you begin living off your accessing your investments and savings and investments. If you savings as income during simply take all that you’ve saved retirement? Are you certain you and invested and deposit it into won’t run out of money? a checking account to live off Choosing an income strategy is an of, you may eventually run out. important step for people who are Being invested in the stock and thinking about retiring and for bond market is no guarantee that those already retired. your money will last as long as Unfortunately, there is a great you do either. Everyone needs an deal of misunderstanding out income strategy, no matter how there regarding income much money you have. An Income strategies: what they are, why Strategy should allow you to draw they’re necessary and the risks an income from your investments that exist for not having and savings, keep up with one.
inflation, and should last as
Income strategy expert Alan long as you do.
Klayman is the creator of
2. They confuse an income MyIncomeStrategy.comSM, an online strategy with an investment educational resource that teaches strategy. An income strategy people about their income deals with the distribution of strategy options. He has money; whereas an investment identified the top 10 mistakes strategy deals with growth of people make when it comes to money. Let’s say your friend has
$100,000. They want to grow that The math used to develop an $100,000. To do this, they would income strategy is very different need to find suitable investments from that which is used to that give them the opportunity to develop an investment strategy. make money over time; an Both incorporate your savings and investment strategy. investments, but they have a
You have $100,000 in savings different purpose. Kind of like and investments, and want to transportation. A race car driver begin receiving a monthly wouldn’t take a snow plow around paycheck to supplement your other the track. Well they could, but income sources (pensions, other chances are they are going to work, spouses income, social lose that race. And the workers security, etc.). To do this you plowing the highways aren’t doing need a method that produces a it with race cars. They could, steady reliable paycheck for you, but chances are they’ll clear is independent of the daily very little snow and end up off fluctuations of the markets, the road.
gives you the opportunity to stay
Most web and in-house with or ahead of inflation, and financial calculators use the lasts as long as you do; an same type of race car logic, when income strategy..
they need a snow plow & vice
If a person doesn’t know the versa. What works for growing difference between the two, he or money, doesn’t always work for she runs the risk of being sold distributing money. Two of the something they don’t need, might main culprits are 1) Market not work for them, and/or running Volatility (or frequent out of money.
investment fluctuations), and 2)
3. They use growth strategies Inflation. Inflation can hurt and the math that goes with them fixed investors, and those on a to develop an income strategy. fixed income. Market volatility
can destroy the best investment example, a 21 year old being strategy. How? What if the market advised to put all of their money goes down a lot and you need into a savings account for money today? Without the right retirement. Why is that extreme? income strategy you end up using There are other fixed investments long term solutions on short term (CD’s, Bonds, and the like) that problems which is called ‘reverse give a higher return with safety. dollar cost averaging’. Not to mention the opportunity
4. They put all their eggs in that is lost for someone that one basket or are looking for a young with so much time that “magic wand.” If this is how you investing in the stock market or or your financial advisor begins stock mutual funds gives them. a sentence regarding your income Another extreme example, an 85 strategy, be careful: “If you buy year old being told to sell all this stock...” “This annuity will of her savings bonds and buy a do it all for you...” or “If I high-risk mutual fund, or stock, make money on this one piece of or to put that money into an property...” Why? Because there investment where she can’t touch is no magic wand for creating an it for 10 years. This example is income strategy. Most well extreme if this 85 year old has thought out and solidly planned no other money, can not afford income strategies incorporate the risk, and needs access to her several types of investments and funds.
investment strategies, are
6. They are more interested in monitored, and adjust with your what is 'hot' or a 'get rich needs.
quick' scheme than solid
5. They are SOLD something planning. The old adage “it’s too they don't need - conversely they good to be true,” is TRUE! This BUY something that doesn't fit is like basing your entire their needs. Here’s an extreme retirement income on winning the
lottery. You’ll “invest” a diversified, asset allocated fortune in the opportunity to get portfolio that is professionally really rich overnight, but what managed can stay ahead, you are are the chances it will pan out? ahead. Don’t look for a silver Slim to none. I’m sure you’ve bullet of 50% a year. If you get seen other examples of one, great. Enjoy it, Savor it, get-rich-quick schemes. If it but don’t ever count on it. sounds too good to be true, it
8. They do things that might usually is, which is why you need work right now, but never look at to solidly and consciously plan it again. This is sort of like your income strategy; not throw balancing your checkbook once and your money away.
then never looking at it again.
7. They think they have a Not very smart, right? Situations chance to earn an unrealistic must be monitored over time to rate of return for a sustained make sure they are still moving period of time - hence their in the direction you want them pursuit of #4. When the market to. People’s lives change over was going straight up for a year time. Income Strategies must or two in the late 1990’s, I had change along with them. Don’t someone look me in the eye and drive yourself crazy on the web, with all seriousness tell me that or the TV, or newspaper every they had figured out the stock minute. Think big picture. If the market, and that any return under big picture changes (you move, 20% a year wasn’t good enough. family changes, big change in the When you set a goal for your economy) you need to look at your income strategy, or for an income strategy again. Otherwise investment strategy, remember monitor your income strategy, some of the averages. Because if like you do your investments. you can beat the averages, you Revisit it at least annually. are ahead of the game. If a well This is a responsible way to
manage your finances. Investments types of investments place a bit change too. Remember the dot com of money in a number of areas, bubble? Some of those investments creating a diversified portfolio. worked out real well, some of In one year, the growth could be those companies don’t exist quite modest. But over 20 years, anymore. It’s 2007, do you really it could be substantial. The risk want to invest like it’s 1999? If for well diversified types of you haven’t looked in 10 years, investment vehicles, especially it’s time. those that are professionally
9. They have an irrational managed can be much lower than fear of investing, or of a putting it all in one place.
specific type of investment.
10. They think that all There are some people out there investing means the stock market. who view investing as just risk, Not all investing means the stock like roulette. They believe that market. There are many types of you don’t have a chance making investments, like bonds, and money when you invest. Others put cd’s, that pay fixed interest and money into an investment on a the actual return can be ‘tip’ and lost it, or got tied up calculated when you first invest into an expensive investment that your money. This calculation yielded little to nothing, and works for those that hold their think that all investments are investments until maturity (the like that. Not so.
investment, not the
There are many types of investor).
investment vehicles out there.
Most of these mistakes are Not all of them require to put simply the result of not all of your money on one thing. understanding or being aware of There are investments intended to your options. Spend some time help spread out risk while still learning about income strategies trying to grow your money. These and increase your level of
knowledge when you meet with a .comSM (financial advisor. The best way href="http://www.MyIncomeStrategy to keep from being talked into .com" something you don’t need, or title="http://www.MyIncomeStrateg making a serious mistake in your y.com" target="_blank">income strategy is to be color="#001000" informed.
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Top 10 Mistakes People Make Regarding Their Income Strategy
