As 2011 comes to a close, most of us are busy with thoughts of family get-togethers, Christmas or holiday celebrations, taking actions to reduce our 2011 income taxes, and so forth. In a few weeks though, we’ll start off with a new year and a chance to do some planning for 2012 and beyond. Some of us will make New Year’s resolutions, some of us may actually follow through with those resolutions (at least for a few weeks or months). Let’s make sure we don’t miss the “big picture”.
What are your long-term goals? How do you plan to achieve them? The most effective way to plan for the future is to think about what you want, write it down, and write down the steps you’re going to take to get there. There’s something different in writing something down rather than just thinking about it or verbalizing it. We’ll expound on this more in a future post. For now, I’d just like you to think about your retirement plan, or your college savings plan, or something else that may still be years away, but which won’t happen unless you have a plan and stick to it.
Most people will need a pot full of money at some time in the future. If you’re young and begin saving every month (and not touch the principal or the interest it earns), you can build up a nice nest egg over 30 or 40 years. It’s called “paying yourself first”. Unfortunately most people either haven’t been taught why it’s so important to do this, or they feel they can’t commit to a regular weekly or monthly savings contribution. So what can you do if you’re say 10 or 15 years away from retirement? Of course the answer is: “Invest!”. Yes, but invest in what? Stocks? Bonds? Gold? Commodities? Land? Swiss Francs?
I’m not an investment advisor and I don’t give investment advice. Like you, I read a lot of suggestions on what the best investments are. I want to kick myself for not investing in gold not too long ago when it was $1,000 per ounce. I didn’t do it because I was afraid- afraid that if I put my money there it might decrease in value (as it has sometimes in the past) and that I’d end up with less money rather than more.
So let’s jump ahead a month to January, 2012. Where should you (or I) think about investing? Warren Buffet has always said to wait until there’s “blood in the streets” and invest (in stocks) when everyone else has sold or is selling, and when panic has knocked prices down far below their true values. Some people are saying that the present state of the real estate market gives us an ideal time to invest, because there’s minimum downside risk and lots of upside potential.
Let’s say you’re planning to buy a vacation home/condo, or you’re planning on selling your present home and either move, or downsize, or invest the proceeds of your home sale. What should you do? If you’re thinking of buying a home or condo, try to take the emotional issues out of your decision and try to make a decision based on the investment possibilities that it affords. Why should you do this? Here are some thoughts from Jeff Brown, a real estate investment advisor who specializes in investing for retirement:
Leonard “Len” Dunikoski, SRES
Diane Turton Realtors- Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 530-6686 (office)
(732) 239-0739 (cell)