Strategic financial planning involves investing in commodities that increase in value, starting early, and avoiding debt. The stock market is not the only source of wealth, and owning real estate and minerals can be profitable. Avoiding high-interest rates on loans is crucial to building wealth.
Strategic financial planning is a detailed process that investors use to plan for their retirement. While there are many viable methods available for achieving these goals, experts in the field have determined that there are essentially three keys that will determine overall success in most instances of strategic financial planning. The first key is to invest in commodities that will steadily increase in value over an extended period of time. The other two factors may come as a surprise: start investing early and get debt free ASAP. Each of these factors plays an important role in building financial wealth over a lifetime, and delaying any aspect can easily result in a much less comfortable retirement.
Whenever investors think of strategic financial planning, the first thing that comes to mind is the stock market. While there is a lot of money to be made on US Wall Street, experts agree that a large amount of a person’s general wealth at retirement age often comes from many other sources. Outright ownership of real estate has always been a highly profitable venture, and commodities such as gemstones and minerals have been statistically equally profitable. Dividing an investment portfolio into many different areas is perhaps the easiest way to generate wealth in any economy.
The age at which an investor starts thinking about strategic financial planning also plays a crucial role in their average retirement age. If just $20 USD is set aside weekly for 20 years and collects an average of 10% annual interest, that would equate to a total of $188,200.00 (USD) saved. Double that equation for 40 years and the net savings would jump to $506,300.00 (USD), which would be a comfortable amount for many middle-class families to retire on. Compound interest can be an investor’s best friend or a debtor’s worst nightmare.
Perhaps the most crucial aspect of strategic financial planning is doing everything possible to avoid paying high interest rates on long-term loans. For example, if a $200,000.00 (USD) home was purchased at 7% interest on a conventional 30-year loan, the homeowner would eventually pay $479,016.00 (USD) if all payments were made within the term. Since the average family buys two to three homes in a lifetime, it would be relatively easy to waste $1.5 million (USD) on interest alone once all the homes, vehicles, credit cards, and other lines of credit are considered. . Staying debt free is a huge part of strategic financial planning that opens up many great investment opportunities throughout a consumer’s lifetime, so it should always be the highest priority whenever possible.
Asset Smart.
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