Finance
Comprehensive Financial Planning
Table of Contents
Comprehensive Financial Planning
You might think you have a pretty good grasp on what financial planning is. In reality, though, on a day-to-day basis, financial planning is going to vary depending on where you are in your financial journey.
By this we mean that, for people just starting out with saving money or even building credit, financial planning might start with just getting a bank account and a credit card. But for those who are long past that stage in life, it gets a lot more complex.
For example, once real money starts coming in, a person might know they need to invest some of it, but they don’t know where to start.
Once people have a family, they might know they need life insurance, but they don’t know how much.
All of this falls under the category of financial planning. People are often comfortable handling some parts of it, and don’t have much of an idea how to handle other parts of it.
Regardless, there are certain things that should be included in all discussions of financial planning.
Get Started Investing
Hopefully this goes without saying, but we’ll say it anyway: You need to save and invest as large a portion of your income as possible. That’s not financial planning–that’s just a fact.
The financial planning part gets into the details of what that saving and investing should look like. It’s a lot more than putting money in the bank (though that should be a small piece of it).
For many people, the biggest question is going to have to do with what kind of investments they should make. Broadly speaking, this is asset allocation, and it–also broadly speaking–refers to stocks, bonds, and cash.
The way you allocate your investments across these asset types is usually based on how old you are, your ability to stomach the ups and downs of the stock market, and financial goals you have set for you and your family.
You already know what cash is, so let’s talk about the other two: stocks and bonds. These come in all flavors, and depending on the things mentioned in the previous paragraph, you’re going to invest in them somewhere on the spectrum from very conservative to very aggressive.
Conventional wisdom says that you’ll want to invest on the aggressive side when you’re younger and building up your wealth, and on the conservative side when you’re older.
And what do those words mean as they relate to investing? Aggressive stocks are the shares of companies that are growing like crazy and may not even be turning a profit. Think Amazon.com 20 or so years ago.
Conservative stocks are shares of companies that are large, profitable, and quite likely pay a dividend to their investors.
As for bonds, they’re best largely ignored when you’re young and building wealth.
Aggressive bonds are generally junk bonds, which pay big yields but have a higher risk of default, while conservative bonds might be the debt of one of the aforementioned companies that offer conservative stock investments, or, at the most conservative end, short-term US treasury bills and notes.
You don’t want to go out there and buy individual stocks and bonds, though. You want that handled by professionals.
Actually, that’s not entirely accurate–you generally don’t want people picking stocks and funds for you, including professionals. That’s called active management, and it will do worse than the overall stock market indexes the vast majority of the time.
Instead, you want passive management, also referred to as index investing. Index funds will track indexes (such as the S&P 500 and countless others) as best as possible, minus a small management fee. Keeping these fees low is one of the keys to successful investing.
Once you’ve chosen your investments, you’ll want to keep track of how they’re doing. You can use software like WealthTrace, which provides comprehensive financial and retirement planning software and also allows users to track their wealth.
Websites such as PersonalCapital allow users to track their investments and transactions while also providing investment management services for a fee.
It’s up to you how far down that path you want to go, but two things to consider: (1) Watching your investments too closely is a recipe for making yourself crazy, and (2) if you invest solely in index funds that match your goals and risk tolerance, you should not need to worry much about a rogue investment going wrong.
Funds will invest in some companies that do well and some companies that do poorly, but the chance of one of those companies’ stocks doing lasting damage to your investment portfolio is vanishingly slim.
Account Types
In addition to asset classes, you also have to consider what kind of investment accounts you should be funding. Here, we’re referring mostly to how the accounts are taxed and when they can be used.
A 401(k) and a traditional IRA are going to be tax-deferred, meaning you won’t pay taxes on their growth until you take money out of them in retirement.
It’s normally best to fund these right off the top, especially with a 401(k), where the employer might match a portion of your contributions. That’s free money, and it should not be ignored.
But it also makes sense to get a taxable account going as well. If you can squirrel away a bit of money–even a small bit, just to get in the habit–into a taxable account each paycheck, you absolutely should do so. As your earnings increase, you can increase your contributions to it.
Where financial planning comes into play here relates to what kind of accounts to fund and in what order. And that’s largely going to depend on what you hope to achieve by saving and investing.
What Do You Want Out Of This?
In most cases, you’ll want to fund that 401(k) up to the matching amount, regardless of what your goals are. But beyond that, where you sock away your funds is going to have to do with when you’ll need the money, and what you’ll need it for.
Most people want to invest for retirement. That’s an easy one. Beyond that, though, the timing of when you’ll need the money should influence how you’re investing it.
For retirement, assuming it’s a long way off, you can afford to be aggressive–and that aggressiveness will pay off in higher returns. For something like a down payment on a home you anticipate buying soon, you don’t want to risk a market crash right when you need the money, so you’ll want to be conservative with it. This is all part of financial planning.
Don’t Forget About Insurance
Insuring your prized possessions is important and part of financial planning, but even more important is insuring yourself. That is, making sure health and life insurance are handled in some way, and at least considering long-term care insurance.
We’ll start with the last one. Nobody wants to think about it, but getting old will happen, and can be very expensive.
If you’re young, start saving for it now. For most people, ‘self-insuring,’ meaning making sure you have the resources yourself versus buying an insurance policy, will make sense.
The problem is nobody knows how much they’ll need, or if they’ll need it at all. The best we can do is make an educated guess based on heredity and health.
Health insurance and life insurance, however, are a bit more straightforward. You’ll want to be prepared to pay for supplemental Medicare insurance when the time comes; we hope we’re not the ones breaking it to you that basic Medicare won’t cover everything.
Putting money into a Health Savings Account (HSA), if you’re eligible for one, is a solid way to handle this issue.
Life insurance, too, is fairly cut and dried. Would your dependents be able to make ends meet (and then some) if something were to happen to you (or the family’s main breadwinner)? Life insurance can make sure they’ll be OK. Preparing for this is also financial planning.
Managing Complexity
As you get older and make money and maybe start a family, life will get more complicated. This rule definitely applies to personal financial issues too. Financial planning starts out pretty simply, but then gets more complex as you try to prioritize your goals, minimize your taxes, and prepare for retirement.
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Table of Contents
The Fascinating Universe of Collectible American Coins
Did you know gold has been a go-to for people wanting to diversify their investments and guard their income for centuries? Believe it or not, in today’s topsy-turvy economy, gold’s steady yields and proven durability are hot commodities for investors worldwide.
One of the trendiest ways to convert greenbacks into gold is by purchasing gold bars and coins.
Gold coins might be particularly tempting to investors due to their snazzy aesthetic and historical value–in addition to their monetary worth. But where to start–that’s the million dollar question? With so many gold coins out there, how do you decide what (and how) to bet on?
Golden Eagles Soaring High – American Gold Eagle Coins
Let’s dive in with the American Gold Eagle coins — a red-hot favorite and a well-known player in the gold coins market.
The U.S Mint whips up these 22-karat gold coins decorated with a Lady Liberty design on the obverse side, while the reverse side flaunts a bald eagle nesting or a bald eagle’s head, year-dependent.
And here’s what’s also interesting–you can claim these American Gold Eagle coins in various weights: 1 oz, 1/2 oz, 1/4 oz and 1/10 oz. The same goes for its ‘cousin’– the American eagle silver coin.
The Canadian Maple Leaf–Not Quiet American, but Close Enough
The 24-karat gold Canadian Gold Maple Leaf coin, sculpted by the Royal Canadian Mint, is an absolute stunner.
Hitting the ground in 1979, this golden wonder was in toe-to-toe competition with the South African Gold Krugerrand and is still regarded as one of the world’s purest and most coveted gold bullion coins.
The design? A maple leaf on the obverse side and an image of Queen Elizabeth II on the reverse.
What’s rad is that Canadian Gold Maple Leaf coins come in an array of weights, from 1/25 oz all the way up to 1 ounce.
Unleashing the Golden Buffalo – American Gold Buffalo Coins
Say hello to the American Gold Buffalo coin–another popular (and very favored)choice among investors and collectors alike.
The design is a tribute to the 1913 Buffalo Nickel conceived by renowned James Earle Fraser. You’ll see a Native American chief’s profile on the obverse side and an American buffalo on the reverse.
What’s fun to note is that American Gold Buffalo coins are 24 karats—higher purity than American Gold Eagle coins.
The Golden Wrap Up
Dropping some money into gold coins can be a savvy strategy to protect your overall investment bundle from losses and fend off inflation.
The coins discussed above are top-notch options for anyone keen on adding a dash of the shiny metal to their investment portfolio or who gets a kick out of curating a collection.
Always remember — before making any investment decision, do your legwork, contemplate your investment goals and risk tolerance, and seek advice from a financial guru for individualized guidance based on your unique financial situation. Good Luck!
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Table of Contents
Top 13 Richest Cities In The World By Number of Millionaires
We live in an era of rapid economic growth and prosperity. Many cities around the globe have become thriving hubs of wealth, attracting millionaires from various industries.
In this article, we will explore the top 13 richest cities in the world by the number of millionaires. By understanding these prosperous urban centers, we can glean valuable insights into the global economy and the distribution of wealth.
1. New York City, United States
New York City, often referred to as the Big Apple, is undoubtedly one of the wealthiest cities globally. With a high concentration of millionaires and billionaires, it is home to the world’s largest financial market, the New York Stock Exchange. The city’s vibrant economy is powered by diverse sectors, including finance, real estate, technology, and media.
Key Industries:
- Finance
- Real Estate
- Technology
- Media
2. Tokyo, Japan
The bustling capital of Japan, Tokyo is a hub of commerce and innovation. With its strong economy, the city has attracted numerous millionaires who have made their fortunes in various industries. Tokyo’s Stock Exchange is the third-largest in the world, contributing significantly to the city’s wealth.
Key Industries:
- Technology
- Manufacturing
- Finance
- Retail
3. London, United Kingdom
A global center for finance and culture, London is home to a large number of millionaires. Its status as a financial capital has attracted wealthy individuals in banking, hedge funds, and private equity. Additionally, the city’s thriving arts and cultural scene attracts high net worth individuals from around the world.
Key Industries:
- Finance
- Real Estate
- Arts and Culture
- Technology
4. San Francisco, United States
San Francisco and the surrounding Silicon Valley have become synonymous with technological innovation and entrepreneurship. The city’s thriving tech ecosystem has generated a significant number of millionaires and billionaires, thanks to the success of companies like Apple, Google, and Facebook.
Key Industries:
- Technology
- Venture Capital
- Biotechnology
- Green Energy
5. Hong Kong, China
Hong Kong, a Special Administrative Region of China, is a major financial hub in Asia. Its strategic location and business-friendly environment have made it a magnet for wealthy individuals in finance, real estate, and trade. The Hong Kong Stock Exchange is one of the largest and most active in the world.
Key Industries:
- Finance
- Real Estate
- Trade
- Retail
6. Sydney, Australia
As Australia’s most populous city, Sydney has a diverse and robust economy. The city’s natural beauty, high quality of life, and thriving business sectors have made it a popular destination for millionaires. Its key industries include finance, real estate, tourism, and technology.
Key Industries:
- Finance
- Real Estate
- Tourism
- Technology
7. Singapore
Singapore is a small island nation with a powerful and dynamic economy. Its strategic location as a global trade hub has attracted wealthy individuals from various industries. The city-state’s pro-business environment, excellent infrastructure, and high quality of life make it a top choice for millionaires.
Key Industries:
- Finance
- Trade
- Real Estate
- Technology
8. Zurich, Switzerland
Zurich is Switzerland’s largest city and a global center for banking and finance. Its stable economy, low tax rates, and renowned private banking sector have attracted a significant number of millionaires. The city is also home to major international corporations and a growing technology sector.
Key Industries:
- Finance
- Pharmaceuticals
- Technology
- Manufacturing
9. Los Angeles, United States
Los Angeles is a global entertainment hub, known primarily for its thriving film and television industry. As the home of Hollywood, the city has attracted numerous millionaires and billionaires involved in media, entertainment, and technology.
Los Angeles also has a strong presence in industries like aerospace, fashion, and tourism.
Key Industries:
- Entertainment
- Media
- Technology
- Aerospace
10. Mumbai, India
As India’s financial capital, Mumbai is home to the country’s largest corporations, stock exchanges, and banking institutions. The city’s growing economy has generated a significant number of millionaires, particularly in industries such as finance, real estate, and technology. Mumbai is also known for its thriving Bollywood film industry.
Key Industries:
- Finance
- Real Estate
- Technology
- Entertainment
11. Paris, France
Paris, the romantic capital of France, is not only known for its rich cultural heritage and history but also for its robust economy. As a major global financial center, Paris has attracted numerous millionaires who have made their fortunes in industries such as fashion, finance, luxury goods, and tourism.
Key Industries:
- Finance
- Fashion
- Luxury Goods
- Tourism
12. Toronto, Canada
Toronto is Canada’s largest city and economic powerhouse. The city’s thriving economy is driven by diverse industries, including finance, technology, and real estate. Toronto’s stock exchange is the largest in Canada and the ninth-largest in the world, contributing significantly to the city’s wealth.
Key Industries:
- Finance
- Real Estate
- Technology
- Life Sciences
13. Shanghai, China
As one of China’s most populous and prosperous cities, Shanghai has experienced rapid economic growth in recent decades. The city is a global financial hub and home to the Shanghai Stock Exchange, one of the world’s largest. Key industries in Shanghai include finance, real estate, and technology.
Key Industries:
- Finance
- Real Estate
- Technology
- Manufacturing
Conclusion
The top 13 richest cities in the world by the number of millionaires showcase the diversity and strength of the global economy.
From finance hubs like New York City and London to technology centers like San Francisco and Tokyo, these cities represent the pinnacle of wealth and success.
As the world continues to evolve, we can expect these urban centers to remain at the forefront of innovation, driving economic growth and prosperity.
Frequently Asked Questions (FAQs)
1. Which city has the most millionaires?
New York City currently has the highest number of millionaires, thanks to its strong economy and status as a global financial capital.
2. Which industries are most prevalent in these wealthy cities?
Key industries among these cities include finance, real estate, technology, and trade. However, each city has its unique mix of thriving sectors, such as entertainment in Los Angeles and luxury goods in Paris.
3. What factors make a city attractive to millionaires?
Factors that attract millionaires to a city include a strong economy, business-friendly environment, high quality of life, and opportunities for investment and wealth creation. Additionally, cities with well-developed infrastructure, excellent healthcare, and education systems, as well as cultural and recreational opportunities, are also attractive to high net worth individuals.
4. How does the concentration of millionaires impact a city’s economy?
A high concentration of millionaires can contribute to a city’s economic growth by driving investments, creating job opportunities, and stimulating local businesses. Their wealth and spending can also contribute to the city’s tax revenue, helping to fund public services and infrastructure projects.
5. Are there any emerging cities that could make this list in the future?
Emerging cities like Dubai, United Arab Emirates; Bangalore, India; and São Paulo, Brazil have experienced rapid economic growth and are home to a growing number of millionaires. As these cities continue to develop, they could potentially join the ranks of the top 13 richest cities in the world.
6. Do these cities also have a high number of billionaires?
Yes, many of these cities also have a high concentration of billionaires. For example, New York City, San Francisco, and Hong Kong are known for their significant number of billionaires in addition to millionaires.
7. How do wealthy individuals contribute to a city’s cultural scene?
Wealthy individuals often invest in and support the arts, museums, and cultural institutions in their cities. They may also sponsor events, donate to charitable causes, and commission works of art, contributing to a vibrant and diverse cultural scene.
Fact Check
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