ALEXANDRIA — With the cost of almost everything seemingly increasing by the week, it’s not a bad bet to take what you can get when it comes to personal finance.
According to data from the US Department of Agriculture’s Economic Research Service, the consumer price index (CPI), a measure of aggregate inflation, rose 7.7% from October 2021 to October 2022. Food prices rose 10.9% over the same period.
The same data predicts that food prices will rise even further in 2023 – between 3 and 4%. Slower but still above historical average rates.
With costs rising, investments could help secure a brighter financial future.
The Echo Press reached out to several financial advisors in the Alexandria area for their top tips for investing and growing income.
Thrivent’s Tim Urness and John Severson compiled a list of advice, and Stacey Doege of Finances Made Simple, LLC provided some of the services the company offers to businesses.
- Develop short- and long-term goals and discover how your beliefs and values guide your financial decisions.
“You’re more likely to stick to a plan and work toward your goals when you can relate it to your ‘why,'” Urness and Severson said.
- Assess your finances. Where are you now?
“In order to make wise investment decisions, it is important to first create a comprehensive financial strategy. Review it carefully and make sure it reflects your short- and long-term goals in life,” they added. “From there, get your investment goals down on paper.”
- Put investment contributions on autopilot and increase over time.
“Small increases over time can help you get closer to your future goals,” they said.
“Once you determine you’re in the right mix of investments and have enough money set aside, be patient and stick with your asset allocation strategy for the long term — or until you reach a point in your life where it makes sense around your allocation.” adapt,” they said.
“Don’t put all your eggs in one basket… Stocks and bonds don’t always move in lockstep, so losses in one asset class can be offset by gains (or less severe losses) in the other,” they said.
The final piece of advice Urness and Severson added is “don’t overreact” and “consider buying” if the market goes down.
“If the market falls, any losses in your portfolio will only be realized if you sell your holdings. The value of your investment can fluctuate over time and you can make or lose money. Evaluate if it’s really the right time to sell,” she said. “As strange as it may sound, now might be the right time to buy. Think of it as a sell with prices discounted from the recent high. Yes, prices may continue to fall, but if you’re investing for the long term, this could be a good time to expand your portfolio.”
When asked “What should I invest in? Forbes has broken it down into short-term and long-term investments.
- Savings accounts with at least 0.17% annualized return percentage (APY).
- Cash management accounts with an APY of 0.25% to 1.25%.
- Certificates of Deposit (CD) with an APY of 0.60%. CDs are term deposits where you lock up your money for a specific period of time and get your money back plus interest when the CD matures, according to Forbes
- Tax-deductible retirement accounts.
- 529 plans.
- Taxable Broker Account.
Doege says she works with many companies to “cut taxes and raise cash.” And she does it with four strategies:
- Health insurance costs as a business expense.
- Keep your kids and spouse busy.
- Home office and heavy vehicle expenses.
- Traveling expenses.
“There are also tax savings opportunities with owner and employee retirement accounts and self-insurance,” she said. “If you decide to sell your business. Or pass your business on to the next generation. These are all strategies allowed by the Internal Revenue Code.”
Doege encourages those interested in developing tax strategies to reach out to her at Finances Made Simple.
Although the United States ranks 112th in the world with the highest inflation rates among 184 entries, according to visualcapitalist.com it’s always a good idea to protect your finances as the future is always uncertain.
