Assets Placement
- Posted by e2 on 11.02.09
- Tags Family Changes, Modern Family, The Evolving Family
You can deposit a large sum of money in a bank, making arrangements (as some banks will do) for the interest earned on the principal to be mailed to you each month. To receive $300 per month, you would need $72,000 invested at 5 percent interest or $60,000 invested at 6 percent.
If you choose this method, there is always the danger that you will dip into the principal, though you’ve sworn not to. If you select this method, keep reminding yourself that once the principal is gone, there is no way of replacing it.
You may consider investing surplus funds in stocks, bonds, mutual funds, or real estate. Where you decide to place your money depends on your investment objectives. What are yours? Do you want your investment to supplement your retirement income? To provide some income but mostly to conserve capital? To provide both income and capital growth? To realize large capital gains? Your objectives will determine the risk, so before making an investment, be certain that you have the best advice obtainable and that you understand the risks thoroughly. Whatever vehicle you choose, remember that there is no such thing as a "risk less" investment and no such thing as a "perfect" savings investment.
While a large income at retirement won’t assure a happy, rewarding retirement, it will give you a better chance at it than a small income. Financial planning is not a whole answer, but it is the foundation which many retirement plans rise or collapse.
Do not make the mistake of putting off planning in this area. Start now. The longer it’s delayed, the more difficult it will be to get started and the harder it will be to ever reach your goals.
