In uncertain times such as these, sound financial planning requires an ability to be reactive with your investments and make them work for you in the best possible way. While stock indices around the world are falling and mortgage rates are rising, among other things, you might be looking for ways to get maximum impact from your existing investments. Here are some of our tips for doing just that.
Hack your retirement accounts
If you have savings in a 401K or similar retirement fund, there are several things you can do to get more bang for your buck. On a basic level, this means taking quick steps such as rolling over your funds from previous jobs, something that many people forget to do, thus losing out on compound interest in the process. You can also sign up for auto-escalation, in which your contributions will rise on their own every time you get a raise or another source of income. These small steps can increase your retirement fund substantially over the years.
Speak to an advisor
There is a range of financial advisory services that you can speak to that can help you get more out of your current assets, as well as your debts. For example, a debt advisor might be able to restructure your existing loans so that your monthly repayments are lower, freeing up more of your cash flow for the things that you need. Meanwhile, a mortgage advisor can help you secure a cheaper mortgage or release equity in your current home. For example, the free online mortgage advice service Trussle offers remortgaging entirely online, so that you can quickly restructure your home payments and improve your cash flow.
Hedge your bets
It’s no secret that the stock market is undergoing some severe volatility right now. Some people view this as an overdue correction, while others see it as a mere blip resulting from temporary market conditions. Whatever your view, it is wise to hedge your bets by investing in some time-tested bear market havens. For many, this means investing in gold or commodities. For others, the most reliable hedge in troubled times is government-issued bonds (although the bond market is not exactly stellar these days either). Make sure to do your research and consult your financial advisor on how best to invest in the current climate.
Don’t lose sight of cash
With asset markets being in flux, the value of cold, hard cash should never be understated. While runaway inflation means that the money in your wallet is worthless, you should not waver in your commitment to building up your personal savings. We know that the majority of Americans do not have enough savings to cover three months of living expenses, a figure considered essential for getting through unexpected financial emergencies. Prioritize your emergency savings before even considering your investments.
Emergency and surprise expenses are an unavoidable part of life. With these strategies, you can keep your head above water when the unexpected occurs.