10 Things to Do in 2010 – Part Two

by Tom Tousignant

in Blog, Financial Safety, Home Buying, Refinancing, Wealth Building

Yesterday I published a list of things to do in 2010.  Today, I’m adding a few more comments to the remaining things to do.Here is a list of ten things you should consider doing in 2010 to get on better footing financially this year:

  1. Build an Emergency Fund
  2. Pay off any debts that aren’t increasing your wealth
  3. Make sure you have the right insurances in place
  4. Re-balance all your assets – make sure your money is where you want it to be
  5. Review your mortgage
  6. Buy an Investment Property or Help Someone buy their first home
  7. Increase your 401k or IRA savings
  8. Save for your kids College Education
  9. Buy the home you really want (Prior to April 30th)
  10. Buy your retirement home now, and then rent it until you need it.

4.  Re-balance all your assets:  For many Financial Advisors, they look at your stock, bond and mutual fund holdings annually or quarterly to re-balance everything.  Make sure you look at all your asset classes – including Equity in your house, and Cash Value in a life Insurance policy.  Read more about how quickly equity in your house can disappear and consider how much of your wealth you want to put in this asset class.

5. Review your mortgage.  Just like you would never buy a mutual fund and ignore it for 30 years, don’t expect your mortgage to be perfect for 30 years, either.  A mortgage checkup doesn’t mean you will refinance – it simply means that you will know if your current mortgage is the best loan for you.  This is more than just interest rates – it involves loan type, house equity, identity theft risk assessment, and minimizing your overall interest costs.

6. Buy an investment Property or Help someone else buy their first home.  With the low prices, tax credits, and low interest rates, an investment property may be a great way to diversify your assets, increase your net worth, and provide safe, affordable housing to your renter while they help you save on taxes, save more money, and increase your wealth.  If you don’t want to become a landlord, higher a rental management company to do it.

With the $8,000 first time home buyer tax credit, it’s a great time to help a family member with a gift of their down payment so they can buy their first house.

7.  Did you maximize your 401k or IRA contributions in 2009?  If not, increase your 401k with-holdings or set up an automatic IRA deposit plan to make that happen in 2010.  Many people don’t like that their 401k turned into a 201k in 2008, but it may be your only way to retire comfortably – don’t prepare yourself for the regrets of not doing what you can, even if 401ks / IRA’s aren’t perfect.

Charlotte at dusk
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8.  Save for you kids college education.  In North Carolina, your 529 plan contributions can be free of state income taxes and anyone can contribute – give your kids’ relatives a chance to make a difference in your children’s lives by setting up a 529 plan and letting them know they can contribute.

9.  Buy the home you really want prior to April 30th.  If where you are isn’t where you want to be, when would be the best time to move?  Right now, actually.  With the low interest rates, $6500 home buyer tax credit, and low prices, this may be the perfect year to get into your dream home.

10.  Buy your retirement home now, then rent it until you need it.  Question:  Will Oceanfront property be cheaper or more expensive in 1, 20 or 30 years?  If you buy now, get a 30 year fixed mortgage, you will have more equity in the house from loan re-payment, and may even be able to have your retirement house paid for before you retire.  If you plan on renting the house in the interim, every trip to your retirement destination could be a tax deductible business trip while you are still working.

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