Seven levels of investing: Which one are you?
Here are seven levels of investing that people take part in.
Level one: Borrowers
These people use Home Equity Lines of Credit, borrow to invest and think that Real Estate onlly goes up. They are shoppers and massive consumers tha have bad money habits. They belive that “Debt is Good”.
Level two: Savers
These people put there money in CD’s, Money Market accounts and clip coupons. They will drive 10 miles to save 1o cents and than say that it was a good deal.
Level three: Smart Investors
They have financial planners and think that everybody is out to get there money. These type of people usually “name drop”, talk about deals they never done and think they can beat the system. Spreading bad news and finding wrong in things to cover up there lack of knowledge. They believe in tips and shortcuts to building wealth.
Level four: Long Term Investors
They usually own there investment decsions and map out a plan. They increase the means and live with there means.
Level five: Sophiscated Investors
They have good money habits. Losing is not a big things, it’s just part of the money game and leads to wisdom. To them bad times equal opportunties.
Level six: Capitalist
They use other people money and other peoples time to create there wealth. Movers and shakers are these people. Creating jobs and making money without money is there goal. To them money is just an idea. Fear is just another opportunity to accumulate new knowledge and wealth.
Five Ways to Use your Tax Refund
You worked all year for this. Worked overtime, made money got taxed.
So what are you going to do with your tax refund.
Here are 5 Ways that the Personal Finance Coach suggest to do.
1. Start or add to your Emergency Fund
Have atleast 3 to 6 months of your monthly income in a Money Market. This will buffer against loss of job, a real emergency comes along and unexpected illness or disability. You dont penailized for withdrawling out of a Money Market and if stops you from using a credit card or tapping into your retirement money.
2. Pay down high interest debt
Paying down lets say a credit card with an interest rate of 18% is like getting a 18% raise or 18% return on your money. Pay down debt is one of the best invesments you can make.
3. Create tax-free income
You can do this by opening up a Mutual Fund based Roth IRA. You can max out at $5,000 for the 2009 years ($6,000 if your over 50 years old). The earnings are tax-deffered and tax-free if you have Roth IRA for over 5 years.
4. Set up a 529 College Fund
This is a great way to reduce your taxes and contribute to someones college education.
5. Open an IRA for your children
You can do the same for yourself but for your children. They can use the contributions tax-free, penalty-free for a car, college…. Just don’t takeout on the earnings, than you will get taxed and penailized.
There you go, 5 great ways to make the best out of your tax refund.
Let me know how this has helpes you by commenting or contacting me. I’ll be glad to help you.
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