What You Must Have BEFORE Starting Your Portfoilio and Investing!

You should only begin your investing and portfolio if you meet these criteria.  And there are some very big reasons as to why.  We are going to talk about this today and make sure you are ready to start your investing and portfolio.  Here are some MUST haves you need to make sure of before you start investing.

1. MUST HAVE, Health Insurance.  If it be through your employer, independent agent, or Obamacare.  You must have health insurance period.  One trip to the hospital and your entire portfolio could be wiped out.
2. MUST HAVE, Disability Insurance.  What if you get hurt or injured?  How are you going to pay your bills and have an income.  I suggest Long Term Disability in most cases.
3. MUST HAVE, No Credit Card Debt.  If you make money with your investments only to turn around and pay off credit cards, what have you really gained?
4. MUST HAVE, At Least 2 Months Salary in the Bank.  Disability Insurance does not kick in and start paying right away.  It also does not cover 100% of your salary.  You must have cash on hand to cover this intermediate time before your Disability Insurance kicks in.
5. If you are married, this must be accomplished by BOTH spouses, PERIOD!

These are the simple must haves before you start regularly investing.  But there is one exception. 
You MUST start investing in your employers 401K or 403B plan right away IF they have matching funds and invest only the amount you have to in order to get the maximum matching by your employer until you have the rest of your must have list completed.  Once you have your must have list completed and you have some extra cash on hand, lets say $2000.00 or a little more.  Then you are ready to find a good Financial Advisor to get you started building your basic mutual fund holdings in your portfolio.

When you get to the stage of investing in Individual Stocks once you have a good firm foundation in your portfolio of mutual funds, then I highly suggest that you start building as part of your portfolio some individual stocks.  You individual stock holding should be NO MORE than 1/3 of your portfolio.  As a younger investor you need to focus on stocks that have room to grow.  As an older investor you should be more conservative, looking for some individual stocks that have room for some growth, but excellent dividends, but still make you money but perhaps at a little slower pace.  The older investor should also be thinking about adding Income Mutual Funds to their holds and relax on growth, especially if you have retired.  I am retired and consider myself in this position of investing in more Income Funds that are going to assist me in my retirement.  There are some very good ones out there.  But right now, the best bang for your bucks is going to be FKINX.  Very low cost and about 6% interest on your shares.  Nice help with those monthly bills and having a little extra cash that Social Security may not provide for you.

So be careful and do the right thing before starting your portfolio.  Are you a younger investor or are you an older investor.  Your choices in your investment strategy will be different.  Your financial advisor will be able to assist you with that.

One closing note.  MOST financial advisor will NOT recommend individual stocks due to corporate restrictions and possible lawsuits if they make a recommendation and you lose all your money.  That is a big part of what this BLOG is about, because your financial advisor is most likely not going to give you buying recommendations on any specific individual stock. I will tell you what my opinion (not a recommendation) is if you ask...but the ultimate choice is yours to make and your responsibility for success or failure.  All you have to do is email me or place your questions in the comments section below. Just for shits and giggles, did you know Rite-Aid Pharmacy (RAD) is up over 80% since August 2013?  Guess who owns shares?  THIS GUY!

Gus S.

Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.