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Be A Savvy Saver


You’ve read the headlines. Maybe it’s even happened to you. People who thought they were doing everything right have seen their savings slashed and other investments falter. The good news is that no matter what your situation, there are still safe, smart, and savvy ways to save for your future.
Before you even think about saving, you should think about spending, says Ken Stern, a top-selling author and radio personality, and the director of Asset Planning Solutions. “How do you manage your house? Many people forget that you have to run your personal life like you run a business. You should be a mean, lean, cash-flowing machine.” Pay off your credit cards. Keep your expenses in check.
Stern argues that now is also a good time to Pounce — which happens to be the title of his latest book. “It’s about how to be an investment predator,” he says. “You shouldn’t do well in spite of the economic crisis; you should do well because of it.”
He suggests reconsidering real estate. Make the slump work to your advantage. “Everyone’s bashing real estate, but we have financing and price affordability for the first time at the same time. We haven’t seen this for almost 20 years.”
Stern also emphasizes the importance of “being active and nimble” with all investments.  “I’m not one of those guys who says stay the course, buy, and hold forever. That’s ridiculous.”
Such advice extends to long-term retirement savings like 401Ks and IRAs, which experts say are worthwhile because of compounding and tax savings. But monitor your accounts monthly. Move your money around. Hold on to top performers and get rid of those that don’t yield a solid return. Be sure to have a healthy ratio in your portfolio.
“If something sounds too good to be true, it probably is,” says Eric Jenkins at Fuller Jenkins. “Risk is always inverse to reward. Diversify. Put some money into absolutely safe things, some money into mostly safe things, and, depending on your age, put some money into risky things.”  
Jenkins adds that it’s critical to keep accessible cash in the bank at all times. “You can keep up to $100,000 in a bank account with complete security because of the FDIC guarantee. If you have more than $100,000, open accounts in several different banks.”
For stowing cash away in the short term, one investment area you should consider is annuities, advises Michael O’Riordan of O’Riordan and Associates. “When you look at annuities with the larger life insurance carriers, they usually have much higher returns than CDs in the bank, and they’re insured. You can do it in fixed annuities, or indexed annuities — both are very popular right now.”
And finally, with tax season here, consult your attorney or financial advisor about legal options for minimizing your taxes. This might include setting up a trust, an IRA, a 529 college savings plan, or a corporation. After all, the more money you save now, the more you’ll have for later.   ANNAMARIA STEPHENS


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