Top 10 Tips for Financial Well-Being

Get your New Year off to a good financial start.

Jan 12, 2014 at 12:00PM

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I love lists like this; they almost always include at least one idea worth pursuing. I hope the same will be true for you here. In offering my top 10 tips, my wish is to help you start the New Year making conscious choices about money and spending in ways that support your values. Money and quality of life are integral to our sense of well-being and our outlook for the future. By aligning your values, goals, and actions, you take steps today to create a more meaningful life and future, regardless of your financial resources.

  1. Set an intention to start the New Year off right. Vow to take an honest look at your financial life and ask yourself how it might be improved. Here's the key: Forgive yourself for past mistakes. As Vicki Robin says in Your Money or Your Life, "no shame, no blame." Removing self-blame and other emotional roadblocks will increase your chances of financial success. Learn something and benefit from mistakes. Then let them go.
  2. Take care of yourself. I recently read the book Wealth and Well-Being, in which the authors describe a beneficial circle. Words around the circumference read, "self-care, self-worth, net worth." The implication is that each concept is part of a continuum. Taking care of ourselves makes us feel better; feeling better increases our sense of self-worth, and this, in turn, translates into greater net worth, allowing us to continue taking better care of ourselves, and so on. And of course, one of the best ways to save money in retirement is to stay healthy!
  3. Set a life goal and map steps to accomplish it. Start small if you like. Success in achieving small goals helps boost confidence to tackle the larger ones. In a recent survey of affluent people, more than half said they wished they'd spent more time on life goals -- living a more meaningful and fulfilling life -- rather than on financial goals.
  4. Create a spending plan. At least track your spending for just one month. Then see if you are spending on what matters most to you. If you are doing this exercise with a spouse, it is important not to criticize each other's spending choices. Try asking, "Do we receive fulfillment and value relative to the amount of money spent on this?" and "Is this expenditure consistent with our values, with what we consider most important?"
  5. Make sure you have an emergency fund, and add to it if necessary. Better yet, have a couple of sources for funds in the event of an emergency. This saves you from going into debt for each and every emergency or having to tap retirement funds.
  6. Revisit your asset allocation (i.e., the percentages you have invested in each of the major categories) of your 40l(k), and all other retirement accounts. Statistics indicate that people often "set it and forget it." You may have an investment mix that you set up years ago. Ask yourself if you are taking too much risk, or not enough. This should be revisited once each year, at minimum. Rebalance if needed.
  7. Make sure you are maximizing your retirement contributions and that new contributions are being invested. However, be careful not to max out your contribution if you don't have an emergency fund. If you need emergency cash, it's important not to have to borrow or, worse, take a hardship withdrawal from retirement funds.
  8. Sell a loser (or two) from your portfolio. You know which ones I'm talking about -- you purchased these investments years ago and have been waiting for the prices to recover before selling them. This is a common, and also irrational, scenario. People have a hard time facing financial mistakes. This can be very costly. (Refer to tip No. 1 -- learn and let go.) If you wouldn't buy more of this investment today, you probably don't want it at all. Put the money into something with better prospects.
  9. Review your risk management. Check your insurance coverage for areas of financial exposure. Having children and moving to a larger home are important life changes. If you haven't looked at these policies in a few years, things could be out of date and you may not be adequately covered.
  10. Make it a priority to become more financially knowledgeable in the year ahead. Commit to reading something once a day or once a week and stick to it! It can be difficult to sort through the many sources of financial information out there. The trick is to find a few trusted sources that speak to you on your level, and make it enjoyable to learn.

Wishing you all the best financial health in the coming year!


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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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