I am not a financial advisor, although I did have my securities licenses at one time. I don’t pick stocks or try to tell which way the stock, bond or commodities markets will go at any time. In fact, I hate doing security research. I have a subscription to a group of newsletters that I feel have done pretty well in good times as well as the bad times and use those to invest. Two things I have learned from investing in the markets:(1) To be successful investing, limit your losses.(2) See (1) above.If you lose 50% on an idea, you have to double it just to break even again. A portifolio with a bunch of pretty good investment ideas can be wiped out by one real disaster you fell in love with and held until it was down 95%.I feel the best way to limit losses in investing is to diversify your investments and know when to sell. Don’t put more than 5% or so of your investment money in any one idea (called position sizing) and use a trailing stop loss to tell you when to sell an investment. If you use a 25% trailing stop loss, when [...]
Brian’s Financial Musings
One question I hear a lot is “when should I start taking my social security payments?” In case you didn’t know, you can start taking the payments as early as age 62, but you can lose 25% or more of the monthly payment you would get if you waited to your normal retirement age to start taking benefits. There are many factors to consider – obviously it makes no sense to take benefits at 62 if you are still working since you earned income will reduce benefits by a percentage until your regular retirement age. Since you will get an even bigger check if you wait to age 70 to claim benefits, you have to weigh several options.It seems that if your family has historically lived to a ripe old age and you are in general good health and don’t the money to survive right away, it will make sense to wait until your normal retirement age at least to start collecting. I think I remember seeing that if you start collecting at 62, you would come out ahead if you lived to around 80 or less (not scientific, I just think I remember reading about the dilema and in [...]
Brian’s Tax Musings
If you have children under 17, you may qualify for the child tax credit in 2010. This is a credit of $1,000 per child that will directly reduce your taxes. If your credits completely wipe out your federal taxes, in some cases you can actually get a refund of the rest of the credit. Here is a link to an article that further discusses the credit:http://hubpages.com/hub/child-tax-creditRemember that you will need to provide your children’s social security numbers and be prepared at some future date to prove they qualify as your dependents. This credit is worth a little extra work.