As the year comes to a close, it’s the perfect time to reflect on your financial health and plan for the future. Here are some smart moves to consider to protect and potentially grow your wealth in the upcoming year.
Firstly, congratulations to those who invested in stocks, real estate, and other assets this year! Remember, though, that financial fortune doesn’t last forever. Those who haven’t yet ventured into investing should prepare to do so when the opportunity arises, or risk losing wealth to inflation. And if you’re a newbie investor, don’t fret over inevitable losses. With time, things tend to improve.
So, what are some smart financial moves to make? Here are the top 10:
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Review your asset allocation: Your investment portfolio needs regular check-ups. For instance, if you initially had a 50/50 balance of equities and bonds, and your equities rose while your bonds fell, you’d need to rebalance to maintain that 50/50 split. Make sure to rebalance at least twice a year to keep your investments on track.
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Assess your income and spending: You might be surprised at how much you’re spending versus what you think you’re spending. Analyze your income and expenditure, then adjust your spending accordingly. Challenge yourself to stick to a set monthly spending limit while trying to generate as much income as possible.
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Declutter and donate to charity: Donating not only aids those in need but also helps you declutter and potentially score a tax deduction. Consider simplifying your lifestyle as well, as this can lead to less stress and more happiness.
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Update your resume: Use this time to refresh your resume with your latest accomplishments. Tailor different versions for various industries or jobs you’re targeting.
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Ensure the safety of yourself and your family: Having the right insurance coverage is crucial. Make sure your health, housing, car, and personal property insurances are sufficient. If you have a significant amount of assets or dependents, consider getting an umbrella policy and a term life insurance policy.
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Review your estate: To avoid potential familial disputes after your demise, ensure your will is up to date. Be organized, create a death file, and inform your beneficiaries about important documents and instructions.
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Forecast your future tax liabilities: Plan for future tax liabilities by analyzing your expected income and expenses. Max out your retirement accounts to reduce your tax liability.
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Tie up loose ends: Complete any unfinished tasks before the new year to start fresh with minimal baggage.
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Check your investment portfolio fees: Run your investment portfolio through a fee checker to ensure you’re not paying excessive fees.
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Rekindle neglected relationships: Reach out to connections you’ve neglected, send them holiday greetings, and share a brief update about your life.
Lastly, focus on your X-Factor, something outside of work that could significantly improve your life. This could be things like moving to a different place, starting a business, finding love, earning a degree, and so on.
Remember, visualizing success can make a huge difference. If you envision a better financial future, you’re more likely to achieve it. Whether it’s a new job, a new relationship, or financial stability, believing in yourself is the first step toward success. So, what other financial moves are you planning to make in the upcoming year?
