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Top 5 Financial Goals Everyone Should Have

8 years ago

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Danny Ippolito shares a few simple, but impactful goals everyone can and should start working toward now.

1. SPEND LESS THAN WHAT YOU EARN 

Creating and adhering to a budget is perhaps the most basic of all good financial rules. Learning to live on less than you earn – no matter what –will help ensure that you always have income left over for savings, investments, and for paying off debt. There are many resources available to learn how to manage your finances, including the help of a competent financial advisor.

2. ERADICATE DEBT

For the purpose of this list, let’s ignore the prioritization between “good debt” and “bad debt”. All debt is bad debt and needs to be paid off. Simply put, being debt free is vital to truly achieving financial freedom. It will leave you with more money for saving and investing and even for spending.

3. MAINTAIN AN ADEQUATE EMERGENCY FUND

It goes without saying that we will all face emergencies throughout our lives. Maintaining an adequate emergency fund can help prevent those emergencies from completely derailing our long-term plans. In addition, an emergency fund will help reduce stress related to ongoing income and expenses or volatile swings in the stock market since you know that you have a cash reserve to fall back on if necessary. It will also establish confidence in your ability to save. Simply put – if you can save money for an emergency fund, then you can save money for your other financial goals.

 4. PLAN FOR EARLY RETIREMENT

Planning for early retirement has its benefits, whether or not you actually plan to retire early. For instance, saving for early retirement will force you to front load your investment portfolio, allowing you to maximize compounding and not have to work as hard at saving later in life. Another benefit is that you will be ready to retire if poor health or family circumstances force you into early retirement. Even if you do not need nor want to fully retire early, you may wish to downshift and not work so hard. Having a solid retirement plan is paramount. If you aren’t sure where to begin, consider hiring a financial advisor to set a plan in motion. 

5. LEAVE YOUR FINANCES AND ESTATE IN ORDER UPON YOUR DEATH

Having an estate plan is not only important to preserving your legacy and making adequate provisions for your loved ones who are dependent upon your financial resources, but also to making sure you don’t leave them with a financial or legal mess. Consult financial and legal professionals to implement an estate plan. An adequate estate plan can serve to protect your assets in life and after your death. It can also minimize the impact of estate taxes if your estate is large enough to be subject to them. Make sure that you have adequate insurance, particularly life insurance. As mentioned in #2 above, make sure that all your debts are paid if possible and that any large or unusual debt can be paid off by a life insurance policy upon your death.

-Danny  Ippolito, Law Group associate and  Cabana, LLC financial advisor

Disclaimers:
 
Cabana Asset Management LLC does not provide tax, legal or accounting advice. The blogs posted on this website have been prepared for informational and educational purposes only.  The tax and accounting discussions have been produced by Holly Signorelli CPA and all legal related discussions have been produced by Cabana Law & PSMC Law groups. The levels and bases of taxation can change. Investors’ tax affairs are their own responsibility and investors should consult their own attorneys or other tax advisors in order to understand the tax consequences of any products and services mentioned on this website.

 
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Disclaimers

January 17, 2024

This material is prepared by Cabana LLC, dba Cabana Asset Management and/or its affiliates (together “Cabana”) for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. This material may only be distributed in its original format and may not be altered or reproduced without the prior written consent of Cabana. The opinions expressed reflect the judgement of the author, are as of the date of its publication and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Cabana to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Cabana, its officers, employees or agents.  

“CARA” is Cabana’s Cyclical Asset Reallocation Algorithm. Scenes assigned as per the judgment of The Cabana Group. Scene names and number of scenes have changed over time in an effort to obtain efficiencies and provide clarity of investment objective. 

This material may contain ‘forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of current or future results and should not be the sole factor of consideration when selecting a product or strategy. All investment strategies have the potential for profit or loss. All strategies have different degrees of risk. There is no guarantee that any specific investment or strategy will be suitable or profitable for a particular client. The information provided here is neither tax nor legal advice. Investors should speak to their tax professional for specific information regarding their tax situation. Investment involves risk including possible loss of principal.  

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Past performance is no guarantee of future results. All investment strategies have different degrees of risk and the corresponding potential for profit or loss. Asset allocation and diversification will not necessarily improve returns and cannot eliminate the risk of investment losses. “Target Drawdown” is merely a descriptive term used to describe the general strategy and objective of the portfolio, it is not a guarantee, nor should it be construed to suggest safety or protection from loss. There is no guarantee that portfolio performance will remain consistent with the targeted drawdown parameter. While risk tolerance and targeted “drawdown” are identified on the front end for each portfolio, Cabana’s algorithm does not take any one client’s situation into account and there is no guarantee that Cabana’s strategies will be suitable for any investor. Investors and advisors should not simply rely on the name of any portfolio to determine what is suitable. It is the responsibility of investment advisors to determine what is suitable for their clients. Cabana manages assets on multiple custodial platforms. Performance results for specific investors will vary based upon differences in associated costs and asset availability.  

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All recommendations made in the prior 12 months are available upon request. Cabana’s allocation history is available here. For additional information regarding our services, including performance disclosures and award methodology, please visit https://thecabanagroup.com/disclaimers/. 

Commonly used index/benchmark definitions:  

All indices and categories are unmanaged and an individual cannot invest directly in an index or category. Index returns do not include fees or expenses. Benchmark indices will likely materially differ from Cabana’s portfolio strategies. Detailed information as to how the returns are calculated can be obtained online from the following link: https://thecabanagroup.com/disclaimers/performance-reporting-methodology/. 

Morningstar’s Moderate Target Risk index  follows a moderate equity risk preference and is based on well-established asset allocation methodology from Ibbotson Associates, a Morningstar company.  

Morningstar’s Tactical Allocation category includes portfolios that seek to provide capital appreciation and income by actively shifting allocations across investments. These portfolios have material shifts across equity regions, and bond sectors on a frequent basis. 

The S&P 500 Index is a market-capitalization weighted stock market index of 500 widely held large-cap stocks often used as a proxy for the U.S. stock market.  

The Russell 2000 and 3000 indices are market-capitalization weighted stock market indices that include, respectively, 2000 and 3000 of the most widely-held stocks and are often used as proxies for the U.S. stock market. 

The Nasdaq Composite Index is a market-weight capitalization index that covers more than 3,000 stocks listed on the Nasdaq Stock Market. What is the Nasdaq Composite, and What Companies are in It? | Nasdaq