If you are dreaming of buying your dream home, traveling the world, or funding your kids through their education, then how do you even begin to save for all these goals? How do you know what is enough to store away each month? This does require some planning and critical thinking but is worth the effort.

Prioritize

The first step is to write down a list of all the things you want to save for, and how much is needed for each one. It is recommended to keep the list as small as you can. Now, it is time to prioritize your list based on needs, wants, and wishes. There are essential things you should be saving for, including retirement and an emergency fund. Then, you can prioritize buying a home or planning to have a child.

Categorize

Next, sort your goals by the length of time it will take to save. The 1^st category is for your short-term savings goals that you want to achieve in the next 2 years. The 2^nd category is for savings goals that you want to achieve in the next 3 to 10 years. This could be for a down payment on a home or for your child’s wedding. The 3^rd category is for long-term savings goals that will not be touched sooner than 10 years from now. This could be for retirement or education. It is important to categorize this way because it will help you decide how to invest.

Invest

It is important to spend more time in the market than to try and time the market for great returns. For short-term goals it makes more sense to invest in less volatile investments, such as certificates of deposits, money market funds, or cash. This will keep your funds more stable to ensure you have the amount you need. If your goals are 3 to 10 years from now, you can strategize a moderate portfolio. More money can sit in stocks but have a good balance of safer investments to preserve capital. For long-term goals, you can have a riskier portfolio that is invested in aggressive stocks. It is still important to have some measure of safety and to not forget about diversifying. Focus on investing first for the goals that are at the top of your priority list.

Review

Taking quarterly, semi-annual, or annual meetings to re-assess your goals and your investment allocations are vital to keeping you on track. You may need to rebalance your portfolio, like selling some stocks and buying more bonds, if your stocks appreciate above your target allocation. The closer you get to your goals, the safer your portfolio should look. This also gives you the space to change your goals or adjust where needed as you realize you may need to save more for a specific goal. Have the long game in mind when planning your investment strategy to save for your goals. Stick to the plan and thank yourself later.

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The post Saving For Multiple Goals appeared first on New Century Investments.

The more money you make, the more taxes you pay — right?

Not necessarily.

“In general, America’s wealthy are different when it comes to tax planning because of the options they may have with categorizing the assets they hold,” said Ron Carson, founder and CEO of Carson Group and co-author of “Avalanche: The 9 Principles for Uncovering True Wealth.”

“Their net worth often presents opportunities when tax planning to help protect their assets,” he added.

Warren Buffett speaks to CNBC’s Andrew Ross Sorkin
CNBC

Billionaire Warren Buffett, CEO of Berkshire Hathaway, has repeatedly pointed out the disparity, advocating that rich Americans pay higher taxes. To make that argument, he famously noted that he pays fewer taxes, on a percentage basis, than his secretary and other employees, since a bulk of his wealth is in stock rather than wage income.

The wealthy love to invest in stocks because when it comes time to sell, the taxes are typically lower than the rates on wage income — if, that is, the equity was held for more than a year. They can also afford to take bigger risks.

“Many who have higher net worth also have higher risk tolerance preferences and risk capacity, so target date and low risk funds don’t always make sense,” Carson said.

Long-term capital gains tax rates are zero, 15 percent and 20 percent for 2018, depending on your income. Federal tax brackets on wages go from 10 percent for the lowest earner to 37 percent for the highest. Short-term capital gains taxes on stocks held for less than a year are tied to your federal tax bracket.

The wealthy also look to manage those capital gains and losses to their tax advantage, Featherngill pointed out.

For example, there tends to be a “flurry of activity” at the end the year, with people trying to take losses to offset some of the gains they reaped earlier in the year. She’s also seeing people investing in opportunity zone programs, which invest in low-income communities, as a way to defer capital gains.

It’s something that can be done by anyone, not just the rich. “If the gain is sizeable enough, in terms of material enough for them, they can look at ways of deferring tax on the gains,” she said.

See full CNBC article here

The post Why the Wealthy love to Invest in Stocks appeared first on New Century Investments.