Lehigh Valley Woman – Finance Section – February/March 2013
by Laurie A. Siebert, CPA, CFP®, AEP® Vice President, Valley National Financial Advisors
What are you considering?
According to Investopedia, the return on investment is the benefit (return) of an investment divided by the cost of the investment; the result is expressed as a percentage or a ratio. Typically, people think in terms of investments in the market such as equities or bonds. While it’s important to understand returns on your investments in the market, what other investments do you make that you should consider the returns or benefits?
How about yourself?
You need to periodically assess the investments you have made in yourself and if that investment is paying off, such as education, family, spirituality and health. Women have more opportunities than ever before today and the ability to control their own destiny. Making decisions about education and careers are a matter of fact but investing in them requires a bit of homework as to the benefits you will receive. Make sure you are considering the cost of your education, the job prospects for the chosen field of study and the flexibility you will have in that career. If you are already employed, you need to reassess if the investment in your education paid off in the career you chose and if you need to make some changes. What are you doing regarding continued professional development? How will you monitor your investment and make sure that you know when to get in, when to get out, when to diversify your skills?
If you have put your career on hold, what are you doing to maintain your skills and stay in the game should you choose to reenter the workforce? There are exponential advancements in technology today and the job you left just a few years ago may require new skills. Don’t forget about the skills you develop while raising your family such as multi-tasking, scheduling and networking. Make sure that you take care of your family, health and spirit as well. Health issues are one of the biggest threats to your financial well being. Investing in your health and family reduces the risk of losses due to medical costs, job loss and divorce.
How about your financial life?
Your financial life isn’t just about the investments you make. Your financial life includes the decisions that you make that impact your cash flow, your savings and your taxes. Learning how to watch your spending habits and your saving habits could build up a portfolio more than the returns you might get on an investment you forget to watch. Imagine leaving your savings in a bank account earning minimal interest and at the same time you spend with abandon. Instead, you could build up that bank account just by spending less and at least know that you are accumulating something. That’s investing in your financial life.
In addition, a good tax planning decision may save more money than any return you might get on your investments. Think about that. If a good tax planning strategy today can save income taxes of 15% or 5%, that’s a pretty good return on the investment in planning. With the American Taxpayer Relief Act recently passed, making sure you understand how it applies to you would be an investment in your financial life. Understanding that smart tax planning can give you a return on that investment is worth exploring. There will be years where planning may not apply and years where it will. Don’t get caught off guard by falling into the same routine. Investing in you means paying attention to yourself. Investing in your financial life means paying attention to the choices that you make and how they affect your cash flow, your retirement, your investments, your estate planning, your risk management and your tax plan. If you need help making that happen, I would be happy to help. More information at 610-868-9000.
In summary
Be proactive, not reactive. Ask yourself what investment are you making in yourself and in your financial life and make the best of your financial choices.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein. Valley National Financial Advisors is the marketing name for Valley National Group, Inc. and its affiliates. Securities offered through Valley National Investments, Inc member FINRA, SIPC, 1655 Valley Center Pkwy, Suite 100, Bethlehem, Pa 18017 (800) 383-8297.
