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Asset Location: Best Accounts for Different Investments

Asset Location: Best Accounts for Different Investments 1

Asset Location is a tax-efficient investing strategy to help you minimize taxes and grow your investments faster by holding investments in the best-suited investment accounts.  This strategy leverages the fact that investments in Roth IRA and 401(k) are tax-free, and investments in Traditional IRA and 401(k) are not taxed until the money is withdrawn. For … Read more Asset Location: Best Accounts for Different Investments

Compound Interest Formula and Examples

Compound Interest Formula and Examples 6

One of the most powerful forces in finances is compound interest. Compound interest is interest that is paid on the principal and also on the interest that previously earned on your investment. This helps you grow your investment at an accelerated rate. On the other hand, compound interest can work against you — for instance, … Read more Compound Interest Formula and Examples

Compound Annual Growth Rate (CAGR) Calculation and Examples

Compound Annual Growth Rate (CAGR) Calculation and Examples 9

You may have come across references such as the S&P 500 has grown 10% annually for the past 30 years or something to that effect. You may wonder what that means and where did they get that number. When someone mentions an annualized return, most likely he is referring to the Compound Annual Growth Rate or … Read more Compound Annual Growth Rate (CAGR) Calculation and Examples

18 Common Retirement Investing Mistakes and How to Avoid Them

18 Common Retirement Investing Mistakes and How to Avoid Them 14

Learn from your mistakes is good advice, but learn from other people’s mistakes is even better. I’ve been investing since 1996. In the process, I have learned a lot, mainly from trial and error. Today, I’d like to share some of the mistakes I’ve made when I was a newbie investor, along with some pitfalls … Read more 18 Common Retirement Investing Mistakes and How to Avoid Them

What to Do Before and After the Stock Market Crashes

What to Do Before and After the Stock Market Crashes 20

When the stock market hits a rough patch after a long Bull Market, it might cause you to think “Should I get out of the stock market?” and “What should I do with my money?” The answer is it depends. Every year, you should be evaluating your needs and adjust your investment strategy to fit … Read more What to Do Before and After the Stock Market Crashes

How to Start Investing in Stocks for Beginners

How to Start Investing in Stocks for Beginners 24

Neither one of my parents know how to invest in the stock market, and it wasn’t a part of my formal education. I had to learn how to invest on my own by trials and errors — so I know how intimidating it is for people who are new to investing. Where do I start? … Read more How to Start Investing in Stocks for Beginners

Should You Invest in Target Date Funds? Pros and Cons

Should You Invest in Target Date Funds? Pros and Cons 30

My first encounter with a Target Date Fund was back in 2006 when my company made Vanguard Target Retirement Funds available for our 401(k) plan. I evaluated the option of using a Target Date Fund but decided against using it because I prefer to manage asset allocation myself using the more traditional asset class-based funds. … Read more Should You Invest in Target Date Funds? Pros and Cons

The S&P 500 Index Historical Returns

The S&P 500 Index Historical Returns 35

The S&P 500 is one of the largest barometers of overall stock market performance available. Most investments use the S&P 500 as the benchmark and compare themselves to the S&P 500 performance. What is the S&P 500 growth rate? As you will see below, the number we regularly use on this blog is a 9% … Read more The S&P 500 Index Historical Returns

Investing in Collectibles: What Makes a Collectible Valuable?

My husband started buying Lord of the Rings action figures after the first movie came out, purchasing them a little at a time. He also has a box full of sports trading cards. A few of them are even worth something. We don’t think of the action figures and sports cards as investments, but if … Read more Investing in Collectibles: What Makes a Collectible Valuable?