Building your financial portfolio

May 13, 2020

Building a comprehensive financial portfolio is the first step in transforming your future professional and personal goals into reality. To understand how to achieve the lifestyle you desire in Tucson, Arizona, you must first take stock of your current financial situation. From there, you can make preparations and take measured steps to reach that ideal destination.

What’s in a Financial Portfolio?

Your personal portfolio somewhat depends on your unique circumstances, such as your career, assets, education planning, and available investment opportunities. In general, though, the goal is for you to be in a comfortable financial position that allows you to invest in your future without undermining your current stability. To achieve that goal, here are a few steps that are commonly part of building a complete financial portfolio:

  1. Pay Off Debt

Most people have some type of debt, whether it’s associated with student loans, a vehicle, or credit cards. Rank your current debts by their interest rates, from highest to lowest, to decide which ones to focus on first. Calculate how much you can afford to invest in debt-reduction each month and follow through. During this process, which may take months or years, avoid making new charges to your credit cards.

  1. Maintain a Retirement Fund

There are a couple of ways to save for retirement and invest in your future. If your employer offers matching funds for your 401k account, take advantage of that. Your employer’s 401k match is basically free cash that guarantees a good return on your investment. If you qualify, you can also open a Roth IRA account and make contributions to your retirement fund that way. Contributions to a Roth IRA can go toward a variety of investments, including stocks, certificates of deposits, and bonds.

  1. Have a Six-Month Emergency Fund

You never know what the future may hold, which is why you need a cash reserve to cover basic living expenses in case of an unexpected occurrence, such as a job loss or medical emergency. Your emergency fund should be able to cover your rent or mortgage payment, insurance costs, fixed payments, utility bills, and groceries.

  1. Consider a Home Purchase

A home is one of the most practical investments you can make. Purchasing and owning a home allows you to convert an expense, or your monthly rent, into equity, according to an article for The Balance. Homes typically appreciate in value and can give you access to capital gains tax exemptions. However, there are certain costs associated with being a homeowner, including interior and exterior repairs, private mortgage insurance, and property tax. Make sure you are in a position to cover those before making such a significant purchase.

  1. Pursue Additional Investment Opportunities

Once you’ve paid off debt, purchased a home, and are contributing to your 401k, you can start pursuing other investment opportunities. Opening a brokerage account gives you access to investing in mutual funds, stocks and bonds, treasuries, real estate investment trusts, and more.

Financing Your Future

The best time to start building your personal financial portfolio is right now. Regardless of your current circumstances, you can begin moving toward a successful investment strategy. At Greenberg Financial Group, we offer a suite of services to help Tucson residents evaluate their financial situation, set a benchmark for long-term goals, and develop a path for getting there. Through consultation, we can help you build and manage a viable financial portfolio to secure your future.

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