When to turn your savings into an investment?

 While saving is one of the most important steps toward financial health, accumulating money without a strategy isn't optimal. The idea is to set a fixed goal following a planned path according to the objectives. Thus, investing savings will be the next step.

 There are 3 types of savings: short, medium and long term. Each one has different objectives. The short one is for things that do not require a lot of money and it is recommended that the savings be for a maximum of one year. The medium-term requires higher amounts and savings of between one and five years are recommended. Long-term savings are those that require more than 5 years of savings.

 But why invest the money from your savings?

 Investing your savings is designed so that the money saved does not lose value. This is inflation, a general increase in the prices of goods and services.

 When prices rise, citizens see their purchasing power diminish. In fact, it means that with the same amount of money we can buy fewer things. For example, if you are looking to save with a view to having a good retirement, by the time you reach that moment, prices will have risen so much due to inflation during those years that the money that has been raised will be insufficient for the plans that you have. .

 It is precisely for this reason that it is recommended that for those goals that require more than one year of savings, an investment method be used that is low risk, but that offers a return above the average annual inflation during those years.

 Saving without investing for a long-term goal will be very difficult to achieve. But to identify where to invest my money and the types of investment that suit you, you must identify your investor profile according to the risk you are willing to assume.

 For example, if you are willing to take little risk, you have a conservative investment profile. You must assume that your investments will not have great returns. The moderate profile aims to balance risk and return. The risky profile is the one that prioritizes performance over risks.

 Saving money or investing it will depend on the ability to save and the plans you have for the future. Experts recommend doing it at the same time, investing 30% and saving 80% of income, as long as a prior analysis of fixed and unforeseen expenses has been carried out. Over time, the investment percentage can be increased to put the greatest amount of savings to work.

 It will always be a good time to save, to learn how to manage personal finances and have a secure financial base against any emergency or unforeseen event. Also, this will be the first step in the transition from saver to investor.

 To be constant in saving, it is convenient to create a strategy according to the goals. For which, a savings account could serve to maintain a better organization of finances and know how to grow your money in the bank, especially when long-term savings are planned.

 John Labunski Financial advisers recommend having more than 6 saved payrolls, and when you get it, the next thing to do is invest your savings to multiply the capital. But where to invest my money? There are different options, although it is best to make long-term investments to obtain a better return on savings. Investing will always be a good idea, but all the options must be analyzed to choose the most appropriate according to the profile and objectives.

 

Learn well about the financial products that exist in the market and always choose the one that best suits your needs and objectives. Check that the option you choose not only offers you the best returns, but also which of the options charges you the least commissions. Avoid saving without investing and achieve your financial goals.

How to start investments with advice?

 An investment advisor develops investment strategies, knowing the needs and objectives that their clients expose them to. As a result of a first small interview, it seeks to provide you with the best options that you can adopt, according to the risks that you can tolerate and the particular changes of these objectives, caused by new needs: the market environment and its effects throughout these life cycles that one has throughout their day to day and to which we will have to adapt.

 If you want to see it this way, this initial interview is very similar when you go to a doctor in which he first asks you what symptoms you have and why you go to him. From this, he will begin to carry out his analyzes and hypotheses prior to the possible condition and the best treatment he can offer to treat you in the best way will be changing as he notices a positive or negative evolution on it.

 What difference is there in an investment advisor?

It is worth mentioning that all those financial advisors who are dedicated to providing wealth advice and are working in investment banks, have to meet requirements, such as presenting an exam which allows them to obtain a certification that supports the technical quality and knowledge about the markets and the various instruments and their main characteristics.

  In addition to this, you will also have to study on issues that address the regulatory framework, that is, the laws that are made to provide protection and a healthy development of the market to generate certainty for all those who wish to participate.

 And last but not least, the ethical part, subject to a specialized code of ethics for the stock market community, an investment services guide that talks about the different modalities and to which all John Labunski financial advisors of this type must adhere. 

How to choose an investment advisor?

Let's see some points that can help you make the decision if you have a good advisor or how to have tools to be able to choose:

That it has a "current" certification , you can consult it on the AMIB page in its list of certified personnel.

Keep in mind that your advisor also attends to other clients in charge of him, but this does not mean that he is not in contact with you throughout the month or that he can report as soon as possible.

Help you optimize your investment strategy and explain the market and economic outlook, providing you with solutions.

Information: a good professional will provide any type of information.

Language without technicalities: manage fluency when providing you with information, including the interpretation of the account statement.

An investment advisor is one who will be accompanying you so that you meet the financial goals that you have set for yourself and is always backed by an institution with more experts who seek the best opportunities in the market. Learn more about how you can get help from financial advisors and what investment products are ideal for you, fill in your information at the end of this note and a specialized advisor will contact you to answer all your questions.

John Labunski plan your financial freedom

 3 reasons to plan your financial freedom

 What is the retirement?

 The definition of retirement or retirement that everyone mentions is to stop working. However, retirement must have a purpose behind it, when you retire without a purpose it is essentially as good as not retiring.

 They all mention that they want to retire young. But, the question is what is your purpose when you stop working? Is it traveling? spend more time with your friends? do a hobby? Aren't we already traveling and enjoying life while we are working?

 Every year we plan to go on a trip for Christmas, summer vacation or the weekend trip, but have we ever sat down to plan our longest vacation?

 "Retirement is the longest vacation of your life."

 Remember, if you have a purpose during your retreat stage, the retreat becomes more fulfilling and has deeper meaning. The perfect retirement is when you have enough income and activities to fulfill your life with satisfaction in your later years.

 In this post I will give you 3 reasons why it is very important to plan your retirement as soon as possible.

 Reason #1. people live longer

 Imagine, around 100 years ago it was the first commercial flight at that time life expectancy was only 38.8 years, today it is 76.71 years.

 In addition, it is said that generations born after 2030 will live on average more than 90 years, the increase in the average age has skyrocketed in recent decades due to technological advances and genetics.

 With the increase in the average age, comes more health problems and therefore a greater need to generate a larger fund to ensure a peaceful retirement.

 Our retirement is expected to last just over half of the years we work , for example, a person who worked from age 20 to age 60 is expected to be in retirement for around 20 years or more.

 Have you ever wondered how many years you have been working and how much money you have saved to this day to maintain your lifestyle in retirement?

 Reason #2. You never know when you will stop working

 Let us remember that there are two types of withdrawal, voluntary withdrawal and involuntary withdrawal:

 Voluntary retirement is a happy situation, because you as an individual have the opportunity to decide how you want to spend your life with a meaningful purpose when you retire.

 Involuntary retirement is something that cannot be controlled. Most of the time it happens due to an illness or accident where you are physically unable to continue working and you need an income to maintain your quality of life.

 To be honest, you can always prepare for voluntary withdrawal, but you can't help but be caught off guard by involuntary withdrawal . Therefore, it is your responsibility to ensure that you are covered for at least that. Approach your main financial advisor and tell him that you want to prepare for an involuntary retirement so that together you can develop a strategic plan.

 Reason #3. Don't be a burden to your family

 If you don't start planning for retirement, it could become your children's responsibility to take care of you.

 And some will say "Hey John Labunski, but shouldn't my children take care of me?"

 First of all, I understand that you have invested a lot of money in your children and you consider that they should take care of you because you took care of them.

 However, you also have to remember that they will have a responsibility to take care of their family. So instead of being a burden to them, why not plan your retirement? And of course if they can take care of you, great, you'll have some extra money to enjoy.

 But, if they can't take care of you, at least at that age where you can't physically work anymore, you'll have money so you won't be a burden to them.

 We have to remember that love only lasts until you don't have money problems. Once you start having problems with money, even your loved ones become a burden.

 All people in the world fall into 4 categories:

• Category #1. Luxuries
• Category #2. Comfort
• Category #3. Poverty
• Category #4. Charity

 Now, let's imagine that a family is in the comfortable category.

 This family stays in a comfortable position when one person is working. If this working person suddenly loses his or her ability to earn an income, her family usually falls directly into category 4 charity and beneficence by other family members.

 To prevent the family from falling in category, we immediately need to put a money “bomb”, because if there is no person working, we need to have money working.

 This process is called income protection.

 If you want to know more about this and many other topics related to financial planning and wealth strategies, Click here John Labunski Dallas that I have for you and stay tuned for future blog posts.

John Labunski - How to prepare financially for our retirement

 The responsibility of planning for our retirement and well-being in the future falls on us more and more. Trusting that the public pension system is capable of covering our needs as we would like is becoming increasingly complex and uncertain. The reality is that if we want to have some security , we would do well to take action on the matter and not trust that the problem will be solved.

 Nobody likes having to worry about the future. But fortunately, facing the issue and planning does not have to be so traumatic . In fact, knowing our economic situation well is less stressful (even if it is not as good as we would like) than avoiding thinking about it. Also, if we are aware of the reality, we will be better equipped and we will be able to find the tools to improve it. Maintaining a proper perspective , with clear and well-defined objectives, helps to reach a successful conclusion. A few simple steps lead to big future profits:

 1. Visualize your retirement

 Carrying out a plan adjusted to the needs of retirement is something very personal, since each case is different. To be aware of what we will need in our retirement, it is important to visualize how we want it to be. Where will we live? What additional needs will we have? It is important to take some time to clearly identify, together with our loved ones, what things will be the most important .

 2. Think long retirement

 Life expectancy in the world is increasing. In United State we enjoy one of the highest longevity rates in the developed world. Science and medicine are continually advancing, providing more and more longevity and quality of life. Thus, upon reaching retirement at age 65, it is perfectly plausible to have a life expectancy of between 20 and 30 more years . The retirement period can be long, and nobody wants to find themselves in need at a very old age.

 3.  Analyze expenses

 During our work stage we find ourselves with all kinds of unexpected expenses. Vehicle repairs, orthodontics for children, home renovations… As retirement age approaches, we will no longer need to incur many of them. But this does not mean that we will not have expenses. They will be other types of expenses . It is important to be aware of what expenses we will have to face when we reach retirement, including taxes, medical costs, inflation, etc.

 4. Identify sources of income

 Most workers contribute throughout their working life, and finally receive a pension from the State, when they retire. Good planning will allow this not to be the only source of income : we will be able to have pension plans , with significant tax advantages, or accumulate financial assets that generate income for us.

 There are many financial assets on the market. Fixed income can provide us with a regular and constant payment, although we run more risk that inflation subtracts purchasing power over time. Variable income can offer us higher returns , but we will have to withstand greater volatility over time. Each source of possible income has its characteristics, its advantages and disadvantages . Good planning is the key to obtaining stable and recurring income.

 5. Prepare an investment strategy

 There are two stages to retirement planning: accumulation and distribution . They are very different phases and have to be managed differently:

 During the accumulation phase we must be more ambitious, enduring a little more volatility in exchange for higher returns. Time plays in our favor. However, as we approach retirement age we want to be more cautious, because a strong market correction can cause our portfolio to significantly decrease in value, and we may need the money at that time. In any case, if we have accumulated more assets, it will be advisable to adjust our risk and return expectations .

 6. Face fears

 In life we ​​encounter many adverse circumstances and challenges. One of the most disturbing aspects that we have to deal with is the uncertainty of the future . Taking a long - term view of our situation and having reasonable expectations are the foundation for properly preparing for retirement plan by John Labunski .

 Making an inventory of our situation in a realistic way is essential to be able to implement an appropriate strategy for our circumstances. Only in this way will we achieve more peace of mind to enjoy the retirement that we have always wanted with our loved ones.

 

 

Posted by: John Labunski Dallas

John Labunski Financial planning for retirement: where to start?

 In recent weeks we have seen how  planning our future retirement is a first-order necessity if we do not want to see our standard of living drastically reduced when the time comes to retire from the professional market.

 Today we will try to synthesize in a series of steps how we can start planning our retirement without it being a complex task. In fact, you will be able to verify that it is actually a very basic budget exercise that is available to anyone.

 The Steps to Financial Planning for Retirement

 business1. Be very clear about the necessary starting data to start the calculations . Specifically, we must start from the age at which we plan to start saving for retirement, the age at which we are likely to retire and life expectancy after retirement.

 To illustrate the various steps with an example, we will start from the basis of a 35-year-old person who decides that from the age of 36 he is going to start saving for his retirement, which will possibly take place at the age of 67 (he is 31 years old to save the amount to be determined later). Life expectancy in United State is estimated to be 85 years old by then, so enough savings will have to be planned to supplement the retirement pension for 18 years.

 2. Set a goal for your post-retirement standard of living . All calculations will obviously depend on the standard of living you intend to have once you retire. Although what is desired by the majority should be to maintain an identical standard of living, it seems logical to think of a minimal drop in it, say, to 80% of the level that was had while being active, so that financially it involves less effort.

 In the case of the example, let's suppose that the gross annual salary of the person in question is €40,000, so their post-retirement standard of living at 80% will imply an equivalent gross annual salary of €32,000.

 3. Always take inflation into account . It should be remembered that we are making plans for many years to come (in most cases more than 40 years), so the effect of inflation on the figures with which we work has a very important weight.

 In the example we will see it very clearly. Assuming an average inflation of 2%, a standard figure in most financial planning), those €32,000 equivalent annual salary will become the 31 years remaining for retirement in the not insignificant figure of almost €60,000. That is, due to the effect of inflation over time, the figure will have doubled.

 Working businessman hand cup of coffee at office workplace desk

 4. Once we are clear about the amounts that we will need to cover in our years after retirement, we have to be able to calculate an estimate of the amount that we will receive as a public retirement pension, in order to calculate the complementary amount that will make us lack to be able to maintain that standard of living that we want.

 Continuing with our example, we will assume that the person in question will receive the maximum retirement pension if they always remain in the gross salary range of at least €40,000 per year. This pension receives a rate of update slightly different from that of inflation (there is a state regulation to update pensions). Given the current panorama of the pension system, we will assume a minimum update of 0.5% per year to place ourselves in a pessimistic hypothesis. This implies that the first retirement pension of the person in the example will be around €42,000 per year. In other words, he will need about €18,000 a year to supplement that public pension and achieve the desired standard of living.

 5. In reality, what we need to know is the amount of total savings that we will need for those post-retirement years, because if the growth rate of pensions is below inflation, the trend will be upward.

 In our specific case and with the aforementioned hypotheses, the total amount saved necessary to supplement the retirement pension will be around €500,000 (always in future money).

 6. To finish, we must determine our savings plan to achieve the necessary amount in the years that remain until our retirement, always considering a conservative average return on the capital that is being saved (although it is true that it will depend on our investment profile, You shouldn't take excessive risks with retirement savings.)

 In the case of the example, we will consider an average return of 3%. With that figure, and making the pertinent calculations, in order to accumulate enough to adequately complement the public retirement pension, the person in question would have to save approximately 13.50% of their annual gross salary each year, an amount that is not unreasonable considering take into account what may initially scare that half a million euros you needed.

 Actually, it is curious to see how what we are actually doing is matching our current standard of living with the future , since following the example, having worked with an 80% standard of living with respect to annual gross salary, and considering that a We are currently going to allocate 13.50% of it to savings, what we are actually doing is placing our current real standard of living at 86.50%, so that we will barely appreciate that drop in level after retiring, because in reality will not mean 20%, but only 6.50%.

  

 

Posted by: John Labunski