Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84#2: SET ASIDE FUNDS FOR YOUR CHILDREN The earlier you start putting away money for college, the less painful it will be in the future. College is expensive, period, but setting up a 529 plan or a uniform gift to minors (which allows assets, such as securities, to be held for the benefit of a minor) and contributing to it regularly will go a long way toward lessening the burden when your kids leave the nest. #3: PAY YOUR CREDITORS Once you have a four- to six-month “cushion,” or a liquidity fund to cover unforeseen expenses, you should begin paying off any debt and not just the minimum payment. You may wonder if you should take your money from a savings account to pay off creditors. You really have to examine the cost of return of leaving it in the bank as compared to the interest you’re paying. Usually, paying off the debt faster is better for you in the long term. NOW YOU’RE READY TO LOOK AT LONG-TERM INVESTMENTS As Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it earns it ... he who doesn't ... pays it.” Investments are really broken down into three categories: Cash/money market accounts, bonds and equities (stocks and mutual funds). I encourage my clients to really know what they own in investments and why. It’s often best to meet with a professional to help you evaluate your portfolio. These days the economy is changing quickly. For example, since the 1980’s we’ve had the longest secular decline in interest rates but now the federal reserve is increasing interest rates to slow economic growth. As rates go up, investments in assets like bonds go down. For a long time they have been considered some of the safest places to invest, but we’re about to enter an environment where that is changing. As the market changes, you may want to consider changing the allocation of your 401(k). It’s important for you to have a good handle on where your funds are. Ask yourself “Is this the best place my money can grow for me?” I say it seems that money is like closet space– there’s just never enough. That said, if you do plan ahead, you can sit back and watch that money grow while you’re enjoying the benefits of your hard work. Greg Morgan has years of experience in the investment and financial planning industry to SFMG Wealth Advisors. Recognitions include, “Bloomberg’s Top Wealth Managers,” and being named one of the “Top Wealth Managers” by Wealth Manager Magazine. Greg has experience assisting a wide variety of clients out of SFMG’s Plano office, including business owners, executives, and medical and legal professionals. ReachGreg atgreg@sfmg.comor972.960.6460. QUESTIONS TO ASK YOURSELF Do you know how you’re invested and why? Are you paying yourself first? Are you paying toward your children’s futures? Are you accelerating paying off your debt? What are your long-term goals? Are you making decisions based on future opportunities?