When it comes to financial planning, organizing your capital into specific "buckets" can simplify wealth management and enhance your financial security. At Park Wealth Management, our experienced financial planning consultants emphasize the importance of strategic allocation to work towards meeting your goals. Here are four essential bucket categories to consider:
Disclosure: Asset allocation does not ensure a profit or protect against a loss.
Establish an everyday fund for routine expenses using a checking or savings account. Keep this balance low to minimize interest loss. Simultaneously, maintain a separate emergency fund account that invests in US Treasuries with three to six months' worth of essential expenses, which can act as a financial safety net during unexpected circumstances like job loss or urgent repairs.
Disclosure: Government bonds are guaranteed by the US government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.
For larger goals, a non-retirement investment account allows for wealth accumulation to purchase properties or other long-term financial goals. A diversified stocks/bonds portfolio represents some of the best potential investment options for maximizing returns.
Disclosure: Stock investing includes risks, including fluctuating prices and loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise. Bonds are subject to availability, change in price, call features and credit risk.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Ensure strong retirement savings by contributing to various accounts such as 401(k)s, 403(b), 457 Deferred Compensation Plans, Cash Balance Plans, Defined Benefit Plans, Traditional and Roth IRAs, which offer favorable tax benefits and potential deductions but penalize early withdrawals.
Assess education needs by evaluating your family's educational goals and financial situation. Create a budget, explore savings plans like 529 accounts, and implement investment strategies. Additionally, identify potential scholarships and financial aid options, ensuring you have the funds to support your child's education effectively.
Differentiate between “good loans”, which are tax-deductible like mortgages, and “bad loans,” including high-interest credit cards. Focus on acquiring tax-deductible loans while eliminating those with burdensome rates, as they'll detract from your overall financial health. This approach can further optimize your wealth management, keeping your finances on track.
Disclosure: Alternative investments may not be suitable for all investors and should be considered as an investment for the risk capital portion of the investor’s portfolio. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.
At Park Wealth Management, our financial planning consultants are ready to assist you in navigating your unique financial journey. Contact us today to discuss our wealth management solutions further.