There is a simple guideline that says the percentage of stocks that you should have in your portfolio is 100 minus your age. According to this guideline, a 60 year old person should have 40% of their portfolio invested in stocks. This is only a suggestion, not a rule of economics or an investment principle. It's a tool that allows you to identify a general correlation of your age to the risk you might assume. Guidelines and decision-making tools are valuable, but not as valuable as your knowledge of the various investment types to provide what you consider to be an acceptable return on your investment.

Investment Types for Your Retirement

Everyone is not the same and one person may be much more accepting of risk in their investment portfolio than another regardless of their age. While stocks, bonds, and some sort of highly liquid cash instrument are included in virtually every investor's portfolio; other types may require a higher ability to accept risk.

*Stock certificates are usually best for investors with a long-term approach in their retirement strategy. It is generally assumed that an investor needs to be willing to hold stocks for 10, or more, years. Some people feel that a person should always have some stocks in their portfolio to provide growth potential. Only you can decide your willingness to accept the fluctuations in the stock market and watching your investment occasionally lose money. Historically, stocks have returned about 10% per year.

*Bonds are issued by a variety of entities. The risk with this investment is directly related to the entity's ability to repay your original investment amount. Obviously, the entity's liquidity and future performance become major factors in deciding which bond option to choose. Unlike stocks, bonds guarantee a return on your original investment, often on a regular basis. Bond return on investment is usually limited to about 7% per year.

*CD's, or Certificates of Deposit, are a relatively low-risk investment. CD's offer a higher rate than most savings accounts, but they come with the same federal deposit insurance protection as a savings account. They can be purchased at different maturity intervals to create a redemption schedule that fits your income needs.

*Annuities are usually a reasonable investment if you have extra money to invest and have already reached your maximum investment for your IRA or similar retirement account. An annuity is an investment with an insurance company and for that reason the rating of the insurance company is a highly important matter.

*Commodities are one of the biggest combinations of risks that exist in the market. Grains such as wheat, coffee, gold, and petroleum are just a few examples of commonly traded commodities. Commodities require a high tolerance to risk because they can be subject to variables such as political changes and weather, neither of which can be easily anticipated by the average investor. Trading in commodities is a relatively short-term investment despite the fact that "futures" are what the primary investment strategy is all about.

*Trading currencies requires a high tolerance to risk, but you can invest in foreign currencies simply by buying foreign bonds. The problem with trading foreign currencies is that the activity isn't expected to provide a return on your investment over the long haul of a retirement portfolio. But bonds are bonds and they come with reasonable expectations of a return regardless of the currency backing the bond.

*Investments such as providing venture capital can be a powerful addition to a retirement portfolio, but only if your liability and exposure to risk is well managed and can be tolerated. Venture capital may be assumed to be an investment on which you may never see a return just like any other stock investment. But a thorough knowledge of the particular company's product and some active participation on the part of an investor will reduce potential risk. Venture capitalists usually have both a higher than average net worth and resistance to risk.

*Real estate investments can provide a regular retirement cash flow if the property is rented, or act as an investment buffer in case the property needs to be sold to pay for an unexpected event in your life. While you would be responsible for capital gains on the sale, your other investments would be secure. At least you would have a choice of what asset(s) you would like to liquidate.

Regardless of your age, planning for retirement requires research, a personal analysis of your ability to accept risk, and a personal involvement in investment decisions that will affect your quality of life during your retirement years.

Visit us to get more information about Bruderman Brothers and Bruderman Brothers: http://www.brudermanbrothers.com .

Visit the Author's website: http://www.brudermanbrothers.com

The post Planning for Retirement appeared first on Submit Articles.

On the other hand, it becomes pretty obvious that if you cannot change your salary in some drastic manner, your best approach is then to aggressively manage your money.

Create a Budget for Success

Managers who create budgets for their businesses know there is a mistake often made by less successful managers. Those other managers spend seemingly endless hours creating a budget for approval by a board or another party and then once approved, they put the budget in a file cabinet until the next year's budget needs to be created.

Successful managers don't just put their budgets in a file cabinet; they constantly review their budgets to ensure any variances are within their expectations and under control. Because they are able to use their budgets to identify any potential business problems; their budgets become a tool for success, not just another exercise in accounting.

Become More Responsible

Adhering to your budget is easier if you are realistic when you create it. People who create budgets do make occasional mistakes in forecasting actual expenses, but they later modify those budgets to conform to the actual situations. You might find yourself doing the same occasional fine tuning of your budget.

Budgets have three basic elements that any person can use; income, fixed expenses, and variable expenses. While the budget creator decides how much detail is necessary, major items should have a line devoted to each of them for easier analysis.

*Income is a pretty obvious category and includes all your planned income during the year.
*Fixed expenses are categories like rent, insurance, credit card interest, and other items that do not vary each month.
*Variable expenses include items like gas, groceries, clothing, utilities, and vehicle maintenance.

It is sometimes tempting to think of your credit cards as an option when you want to buy a new couch or go on vacation. But, the interest rates will soon become a monthly burden on your income to the point that your couch might cost you twice as much as if you had saved the money and paid cash. Only if credit cards are paid off each month can the onus of monthly interest expenses be avoided.

If a budget includes an expense category for a monthly savings account deposit, an emergency fund can be built to protect you in a time of unexpected hardship.

Avoiding Catastrophes

While there may be a difference of opinion on the specifics, everyone agrees they should have some money set aside in case of emergencies. Without protection from a catastrophic situation, you could end up liquidating your assets and paying penalties for their early liquidation in some cases.

Ideally, enough money to cover your full expenses for six months should be enough to avoid potential financial ruin and the heavy use of credit cards that will generate hefty interest payments. Make sure all your expenses are covered like mortgage or rent, medical insurance, food expenses, and, yes, even some money to cover entertainment expenses. Budgeted entertainment in case of an emergency does not mean this fund should be used for non-emergency purposes. This is not a vacation fund, it is an emergency fund.

Make sure your emergency fund is liquid and also earning you the highest return on your investment. As this fund grows, you can reevaluate how it is invested and diversify into other highly liquid investment types.

Visit us to get more information about Bruderman Brothers.

Visit the Author's website: http://www.brudermanbrothers.com

The post Saving More Money to Invest appeared first on Submit Articles.