Timeless Money Rules: Investing, Debt, and Estate Planning
Money magazine has a series on 20 timeless money rules that's pretty interesting. Over the next few days, I'll be sharing a few of these as well as my thoughts on them. The first one for today is to invest abroad. Money's thoughts:
Most Americans have less money in foreign funds than the 15% to 25% experts recommend. But you don't have to be like most Americans.
I'm in the category of "most Americans" here but I've been working on putting more money in international index funds the past couple of years. I should be in the 15% to 25% range in a couple more years.
Money next gives some thoughts on how not to panic when the market drops:
When the Dow sheds 300 points in a day, it's natural to feel doomed. And when the market surges, it's easy to be convinced that stocks have entered "a new paradigm," to echo a bubble-era phrase. Don't delude yourself. As Sir John Templeton notes, "The four most expensive words in the English language are, `This time it's different.' "
This is why I've been going against the flow recently and why, despite the fact that the market's been rocky, I think it's a great time to invest.
Money now moves off investing and suggests people need to borrow responsibly:
Face this truth: If you let them, lenders are only too willing to advance you more than is good for your family. Mortgage banks and credit-card issuers don't care if your monthly payment makes it impossible for you to sock away money in your 401(k) or fund your kid's 529 plan.
So what should you do? Get out of consumer debt, pay off your credit cards, and save for major purchases like cars. And if you're really disciplined, work on paying off your mortgage.
Finally, for today, money suggests that you exit gracefully. In other words, they say that you need a will and an estate plan. I couldn't agree more.
For those of you who want more details on these thoughts, check out the following:
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