
Financial Planning
Start planning and stop worrying!
In a recent Gallup poll, 60% of those surveyed said they worried about
their financial future.
There are a few simple steps you can take to help reduce
your worries:
- Put aside some amount regularly in savings or other investments. The
compounding of earnings can be substantial. The longer your investment
period, the greater the beneficial effect of compounding.
- Invest in what you know. The better informed you are, the better your
investment decisions will be. If you don't want to learn about investments,
consider hiring a money manager and paying him or her to do your investing
for you.
- Diversify your investments. Have some of your money in an investment
that is easily converted to cash in case of emergencies. The old adage
"don't put all your eggs in one basket" is good advice when
it comes to your investments.
- Prepare an annual balance sheet (a list of all your assets minus all
your debts) to determine your net worth. A comparison of your annual
balance sheets will reveal your success at growing your retirement funds.
- Plan where you want to be financially by retirement age. The calculators
listed below will help you determine your savings requirements. Once
you know how much you need to save, put your plan into action. Over
90% of Americans must rely on the government or others for assistance
during retirement. With proper planning and diligence, you can be among
those who can retire in comfort.
- Don't use credit to purchase consumption items. Wait until you can
pay cash for things which decrease in value. Borrowing money to purchase
a home is usually a sound idea. Using credit to purchase household furnishings
is not.
- Pay off your credit card balance every month. Your credit card should
be for the convenience of purchasing, not a source of permanent finance.
The interest rates are much too high.
- Monitor your investments to maximize your after-tax return. Use the
calculator below to compare the long-term results of different interest
rates. The difference that a 2% greater return can make in the growth
of your investments is dramatic.
- Have your insurance agent do at least an annual review of your insurance
needs to determine that you are neither under- nor over-insured. Be
sure to contact your agent when you buy or sell any property.
The Magic of Compounding!
If you could have one of the following as your pay for thirty days' work,
which would you choose?
(A) $10,000, or (B) a penny the first day, two cents the second day, four
cents the third day, eight cents the fourth day, and so on, with each
day doubling on out to thirty days.
The $10,000 sounds very attractive, but the fact is that the penny doubled
each day for thirty days adds up to over five million dollars. Of course,
that is 100% interest compounded daily, a rate not available to most of
us working folk. Nevertheless, this example shows you the power of compounding
on your investment earnings.

Do you know how much you need to set aside to fund a college education
for your child?
How much must you save each month for your retirement?
What will your Individual Retirement Account (IRA) be worth when you
get ready to start drawing on it?
You can get rough answers to these and other questions very quickly by
using the following calculators and making a few estimates on your part.
If we can be of help or answer questions for you, please call us.
Education
Funding Calculator
Monthly Savings
Toward Retirement Calculator
What will my
fund grow to? Good for IRA estimates
Mortgage Payment
Calculator
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Eliot J. Lewiskin,
CPA, PA |
Certified Public Accountants |
2125 Center Avenue, Suite 307 |
Fort Lee, NJ 07024 |
Tel: |
(201) 592-8160 |
Fax: |
(201) 592-8199 |
e-mail: cpa@lewiskin.com |
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