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July 3, 2018

The Financial Periods of Your Life

Financial Freedom (A Continuing Series)

The Financial Periods of Your Life - There are different ways to look at this, but some basic "guidelines" make it easy to understand the goal.

As you move through life, your needs and your tolerance for risk change, and you will make portfolio adjustments as you progress through these financial periods. These are rules of thumb, and it is almost never too late to begin.

Formation (25 - 35 Years of Age) - Awareness. Learning to manage cash flow is of critical importance during this financial period.

At the end of this period, you should have developed your long-range investment program.

Accumulation (35 - 55 Years of age ) - Investing in growth-oriented investments. Be willing to sacrifice current income and some luxuries to build your net worth.

Preservation (55 - 65 Years of Age) - Shifting from growth-oriented investments to income-oriented investments over the planning period. Still accumulating!

Disposition (65 - 100 Years of Age) - Living off the Income and possibly into the principal. If you planned and saved, you won't go from your earning years to your yearning years.

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