Things Seniors Need to Do Before Investing
Older adults are always ready to invest their savings because they get too excited about the likelihood of getting good returns on their money via investing. This is understandable because they don’t want to live their money lying idle in the bank accounts but instead work for them. But before diving into investing, get enrolled in Humana Health Insurance 2020 with https://www.healthinsurance2020.org since there are things you should do first. Without doing the following things, you will be making a big mistake.
- Pay off high-interest debts and all your credit card debts
This is very important. In case you have any high-interest debts, there is totally nothing you will be doing better with your savings or money than paying down those debts. Anything above 8% interest will drag you down. There is absolutely no investment that can offer anything nearing a stable long-term return which you will save if you pay off your credit cards. Imagine paying extra money on a debt with a 14% interest rate every year. This is functionally not different from making an investment that returns 14% annually after taxes. Actually, there are few investments out there that can guarantee a consistent profit of 14% of the total investment. When you pay off your debts, you will have fewer bills to pay, and you will have more money to invest.
- Establish a healthy cash emergency fund
Life can sometimes intervene in the plans that have been best laid. Your investment might be a great one, but what happens if your car breaks down or if you get sick, for example? It is even worse for those investors who have already been around for more than 60 decades because they are more prone to diseases.
In bad situations like the ones mentioned above, you will be forced to turn to credit cards, and this means that you will have new debts to pay. All these can interfere with your investment plans. This is why you should have a cash emergency fund so that whenever unexpected happen, you will have an account with money to take care of the situation without having to go into debts.
- Eliminate your bad spending habits
Bad spending habits are among the worst investing enemies. If your expenses exceed your earnings, it means that you will have more money left to save or to expand your investment. Worst still, you might end up turning to your credit card and this means higher bills at the end of every month because you have added debt and interests.