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Home » Secure the Future: Steps to Building a Complete Financial Portfolio

Secure the Future: Steps to Building a Complete Financial Portfolio

December 21, 2019 By The Fortunate Investor | This article may contain affiliate links. For more information visit our Disclosure

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Secure the Future: Steps to Building a Complete Financial PortfolioIf you’re wondering how to build a portfolio, look no further.

Financial portfolios can tell a lot about a person because they represent responsibility and dedication. Many people struggle to keep a good financial portfolio because they’re drowning in debt and continue to borrow money.

By building a portfolio, you are setting yourself up to have a future without worrying about money. The whole point of a financial portfolio is to fully fund your retirement and give you enough wealth to provide for others.

Read on to learn more about how to start a portfolio and properly invest your money.

Pay Off Credit Card Debt

The first thing you can do to build your portfolio is pay off credit card debt. The problem with credit cards is that they typically have high-interest rates that increase the longer debt is held. What you should do is start tackling the debts with the highest interest.

You’ll want to pay the minimum balance on all debts so that you don’t default a payment. Focus on the debt with the highest interest until it’s completely paid off. After you’ve paid it off, move on to the next highest debt. Whenever you’ve paid off a card, stop using it. Do this until all of your credit card debt is gone.

This typically takes several years because people acquire multiple credit cards. No matter how long it takes, all that matters is that you’re working towards paying the debt off. You’ll find that you have more money in your pocket when you stop using credit cards because you won’t be making impulsive purchases.

Invest in a Roth IRA

When people are building a personal finance portfolio, they often don’t think about the Roth IRA. The Roth IRA is one of the best investments you can make because it allows you to earn a passive income providing that your annual income doesn’t exceed $137k if you’re single or $203k if married.

All of the money that you put into the Roth IRA is tax-free. When you reach the age of 59 1/2, you can withdraw all of the money and not worry about taxes. As of right now, you can contribute $6,000 per year. These contributions can be used to invest in things like stocks, bonds, etc.

This essentially means that if you purchased $10k of stocks and it turned into $5 million, you wouldn’t owe anything in taxes. The only downside is that this money is locked in the account until you reach 59 1/2 or you have to pay a 10% penalty fee and taxes.

Purchase a Home

Purchase a Home

If you look at the Antonacci Dual Momentum strategy, you’ll see that another one of the best investments is real estate. You should be saving money to make a good down payment on a house, which will play a major role in the completion of your financial portfolio. Buying a house gives you what’s known as equity.

All of the interest that you pay on a mortgage is tax-deductible, and houses typically appreciate each year. Real estate is a favorable market that many people go to when they’re trying to earn a large sum of money.

When becoming a homeowner, you should be aware that you’ll have to pay for things like utilities, property tax, and home repairs. Paying for homeowner insurance would also be in your best interest in case your home suffers damages.

Create an Emergency Reserve

Create an Emergency Reserve

An emergency reserve is crucial because it will allow you to support yourself in the event of an emergency. Emergency reserves are essential savings that will cover your basic living expenses for several months. Most people save up 3-6 months of expenses, a reasonable time for them to get back on their feet.

When you create an emergency reserve, you should have enough money to pay for the following:

  • Mortgage payments
  • Insurance
  • Utilities
  • Groceries
  • Fixed payments
  • Minimum payments on credit cards

Purse Various Investment Opportunities

Purse Various Investment Opportunities

There are a variety of investments you can add to your investment portfolio. If you open a brokerage account, you’ll have access to stocks, bonds, mutual funds, treasuries, and more. Today, most brokerages allow you to trade stocks without commission fees, so they’re more accessible than they were in the past.

Mutual funds are something you should invest in because they have accurate annual return rates. Most of the annual return rates average anywhere between 7-12%, all you have to do is put money in and let it sit.

You could also go for index funds, which are essentially the same thing as mutual funds. The difference is that mutual funds are controlled by professional stock pickers. Index funds are groups of stocks that are notable for raising in value over a period.

Start Building a Portfolio today

Start Building a Portfolio today

Building a portfolio is something that everyone should do because it puts them on the right path to build wealth. As they get older, this wealth can be used to help their families and others. Paying for your children to go to college will be easier, you won’t have to worry about retirement, and you can do more things you enjoy.

We encourage you to start putting together a financial portfolio, firstly by eliminating any credit card debt you have. This is something many people neglect, so you should make it your mission to get rid of it. After that, you can start focusing on other investments.

Browse our articles to receive more financial advice that will help you find success.

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Are you up to your ears in high-rate credit card debt? Don't worry; there is a way out! Here are 7 smart tips for getting out of credit card debt fast. Does the thought of checking out your credit score make you want to scream? Credit cards are a great way to lessen that anxiety. Like all good things though, as quick as it can help, it can also destroy if you don't pay on them. Once you pile on the credit card debt, it can be a challenge to get out. Don't let this discourage you. There are a few ways to save yourself from drowning in numbers. Here are a few tips on getting rid of credit card debt and claiming your life back. 1. Stop Using Your Card If you know for a fact that you have terrible spending habits, hide your card from yourself before you sink too far into the pit. You can cut it up, lock it in a safe and lose the code, package it in duct tape and bury it in the backyard, use a wood chipper, the options are endless as long as it is out of your hands. If you're using it to pay your bills then, try and set up a payment plan with your utility company. Or downgrade your house or car. Fitting your bills into your budget will make you less likely to use your credit card and give you a little breathing room for managing credit card debt. 2. Make a List of All Your Debt Studying your enemy is one of the key factors of defeating it. Tis means you should make a list of all the credit card debt you've currently got under your belt. Making a list will help you figure out which one you should prioritize and pay off first. How do you determine this? Check out the standing of all the existing credit card debt you have and their interest rates. 3. Come up with a Strategy Credit cards can do massive damage to your credit score so you want to pay the one with the highest interest off first. After you've paid off that one, go on to the next one. Eventually, you will pay them all off as you go down the line. Make sure you continue making minimum payments on them after so you don't find yourself drowning again. 4. Try to Get a Lower Interest Rate Not all credit card companies will be agreeable about giving you a lower interest rate, but it never hurts to try for the sake of getting lower payments. Sharpen up your negotiation skills by using any kind of leverage you can to get them to work with you. Bringing up how long you've been with them or your good standing up to this point might get them to budge a bit in your favor. If they are completely unagreeable, then transferring your debt to a new, lower-rate card might be an option, or you can take out a personal loan. Personal loans can be a little harder to get, but you'll find that if you can get one to pay off your debt, the interest rate is usually way lower than your credit card one. Eventually, the loan will replace your credit card debt with an installment loan. Believe it or not, this will actually look better on your credit. To find out more on personal loans you can visit this website. 5. Find a Payment Plan If getting a lower interest rate still doesn't work out for you, then it's time to figure out some other options. The easiest thing you can do is either ask for a deferment or a new payment plan. Credit card companies like money, so they will most likely work with you on this so they don't have a non-paying account in their system. 6. Limit that Spending If you limit your spending, you'll have more money to put toward your credit cards each month. Just think: skipping out on that morning coffee could allow you to pay your debt faster and lower your interest rate. If you want to make a little game out of it you can join spending challenges. This could mean going on a 14-day to a year-long spending ban depending on what's best for you. This is recommended if you just don't trust yourself to stay on budget. 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Put your credit cards back in your control. If you're new to the credit card world, you could make a lot of mistakes that will put you into debt without even realizing it. Visit our blog for a beginner's guide to credit cards

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