Too Busy Working as a Corporate Executive to Manage Your Finances? These Are The Simple Steps You Can Take Today
Corporate executives often find themselves in an interesting predicament. After they’ve managed to put in the work to nab the high-paying positions they have now, they don’t have the time to devote to managing their growing wealth. This doesn’t have to be the case all the time though.
With just a few spare minutes a day or a bit more than an hour a week, corporate executives can start taking control of their finances and ensure that their hard-earned money is going to the right things. Just follow these simple steps to get started.
Reconfiguring 401(k) Contributions
A good place to start is calibrating one’s 401(k) contributions. First, try to find out the current account balance and the exact amount one is contributing from their paycheck. It’s best to pay the maximum contribution as it can potentially save one thousands of dollars in income tax.
Another thing people should know is the specific allocations their money is going to. Those in their 20s and 30s are then recommended to focus their investment on stocks. This would give them the highest returns as this investment instrument needs a long time to fully mature.
Meanwhile, older executives who don’t have the same luxury of time are advised to only allocate 50% and 70% of their contributions towards stocks to balance the risks that come with betting on the stock market.
Corporate executives are also warned against putting too many of their eggs in one basket by keeping both their income sources and investments tied to that of the company they work for. When the company faces rough times, one’s wealth will also suffer with it.
This is a particularly risky thing for those nearing retirement age as a drop in the stock market can spell ruin for their long-term plans after retiring.
To avoid this kind of scenario, people should limit their company stocks at just 10% to 15% of all their assets. Instead of solely betting on their employer, they should instead diversify their portfolio to further minimize risk.
Preparing An Estate Plan
Life is uncertain and death or accidents can happen to anyone at any time. While these can’t be predicted, there are ways people can ensure that they’re passing won’t leave their loved ones with financial problems. One way to do so is by creating an estate plan or consistently updating an old one.
Dying without one can put one’s family with legal bills that can pile up making mourning much more difficult for them. In the end, people would save more money now by getting their affairs in order than leaving them in disarray.
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