A Checklist to Get You Started

I had the pleasure of speaking  with Dina Cataldo of Soul Roadmap podcast to discuss “How to Reach Your Money Goals.”  She has put together an informative and inspiring show aimed at giving people tools and strategies to live their best lives, and she covers a myriad of topics.

It was a lively discussion and it inspired me to put together an Investor Self Defense Checklist to help make sure your financial plan works for you:

 ____I have an emergency fund of 3-6 months’ worth of living expenses (more, if self-employed).

____ I know what debt I carry, the rates I pay and am working towards paying off debt.

____ I participate in an employer-sponsored retirement plan (e.g., 401(k), 403(b), Simple IRA, etc.) because it lowers my taxable income and helps me save for retirement.

____ If I don’t have a retirement plan offered to me, I contribute every year to either a Roth IRA or Traditional IRA (maximum investment amount is $5,500 per year for those under 50; $6,500 for those 50 or older).

____ I save 20% of my income and, if not, I plan on reaching that percentage of savings in years by increasing the amount I am saving every year by __% (this includes all sources, and any contributions to retirement plans).

____ I contribute to my company retirement plan and get the employer match (free money).

____ I don’t own share class funds (A, B, C, D) which have sales charges / high fees.

____  I have gone to FINRA’s Fund Analyzer to look up my fund expenses.

____  My financial advisor, a fee-only fiduciary, does not earn commissions to sell product.

____  I do not own annuities in IRA, Roth IRA or other retirement account, such as a 403(b).

____  Money I need to fund short-term goals (5 years or less) is in cash.

____  Investments in stocks or mutual funds are with money not needed for 10 years or more.

____  I own a mix of stocks (U.S. and foreign) and bonds (high-quality U.S. bonds).

____  I understand why I own what I own in my portfolio.

____  I communicate with my advisor about any changes in my financial life (e.g., debt, employment, marital status, health, inheritance, birth of a child/grandchild, income).

____  I have a will, health care proxy, durable power of attorney and, for my minor children, a Guardian and Trustee set up in the event they are ever orphaned.

____  I have term life insurance that will cover my income until my children reach age 22.