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Making Smart Choices: Experienced Investors

May 9, 2019

Experienced Investors review their finances.New choices for the future

There are many reasons an experienced investor might seek out investing consultation. If you already have investing experience but aren’t happy with your current situation or results, have questions you aren’t getting satisfactory answers to, want better attention and service, or possibly have additional funds you want to invest, we are here to help.

A big part of continued investing is evaluating your current situation, and making adjustments based on market changes and any changes to your financial life. As a seasoned investor, you can always learn more, improve your investments, and consider new options. We’ll discuss your current level of investment and risk, your goals, and any changes you’d like to make to your portfolio. First Source and Choice Investments invite you to take advantage of our superior experience and Member service.

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Stock Market / Stock Funds, Securities, and Advisory Services are products of Choice Investments LLC and offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. Choice Investments LLC and Cadaret, Grant & Co., Inc. are separate entities. You can check the background of these financial professionals through FINRA’s BrokerCheck. First Source Federal Credit Union is not a registered broker dealer and is not affiliated with Choice Investments LLC. 

NOT FEDERALLY INSURED    •    MAY LOSE VALUE    •    NO CREDIT UNION OBLIGATIONS    •    NO CREDIT UNION GUARANTEE 

Funds invested through Choice Investments are not federally insured, may lose value, and are of no way obligations of First Source FCU. Involves investment risk and may involve loss of principal. First Source has no guarantees of securities and annuities products offered through Cadaret, Grant & Co., Inc. Licensed to offer securities in the states of AZ, CO,CT, FL, IA, MA, MD, ME, MI, NC, NY, PA, SC, & VT.

Starting Out: New Investors

May 9, 2019

Begin your journey with smart choices

If you’re young and just getting settled in your career and adult financial life, you may feel you’re finally earning enough to consider investing some of your money. Our first piece of advice is to make automatic deposits from your paycheck into an employer-sponsored 401K or other retirement plan (if your employer makes one available). If your employer matches contributions, it’s an even more attractive investment choice. You'll want to take full advantage of this wonderful investing opportunity. Once you’ve done so and are ready to consider other investments, we will be happy to guide you with some prudent recommendations about your savings. 


Investing Your Savings

Investing always starts with saving. Since there are inherent risks in stock market investing, and greater gains and losses are possible, we encourage beginning investors to set aside enough for their immediate and emergency needs before putting money into the stock market.

When we meet with you, we’ll start with a thorough conversation about your financial standing, well-being, and current needs. We’ll look at your needs for the future, as well as your risk tolerance, and create a unique plan just for you. Part of that plan is working with you to decide how much you can comfortably invest initially, and each month. Investing is a dynamic process that you should adapt to changes in your financial life, so you can increase, decrease, or stop the amount you invest at any time without penalty. We can show you projections of how those changes could affect your future funds.

When investing, think diversification over the longer term. It is recommended to give yourself a minimum of 3-5 years to see how your investments do. Since funds do fluctuate over the short term, longer is better.

Let us and our friends at Choice Investments help put investing principles to work for you, and make a smart start to your investing.

Learn More


Stock Market / Stock Funds, Securities, and Advisory Services are products of Choice Investments LLC and offered through Cadaret, Grant & Co., Inc., a Registered Investment Advisor and Member FINRA/SIPC. Choice Investments LLC and Cadaret, Grant & Co., Inc. are separate entities. You can check the background of these financial professionals through FINRA’s BrokerCheck. First Source Federal Credit Union is not a registered broker dealer and is not affiliated with Choice Investments LLC. 

NOT FEDERALLY INSURED    •    MAY LOSE VALUE    •    NO CREDIT UNION OBLIGATIONS    •    NO CREDIT UNION GUARANTEE 

Funds invested through Choice Investments are not federally insured, may lose value, and are of no way obligations of First Source FCU. Involves investment risk and may involve loss of principal. First Source has no guarantees of securities and annuities products offered through Cadaret, Grant & Co., Inc. Licensed to offer securities in the states of AZ, CO,CT, FL, IA, MA, MD, ME, MI, NC, NY, PA, SC, & VT.

Posted in: new investors

It Pays to Save Early

May 2, 2019

A great saving strategy for the long term can be summed up as, “Save early and often.” Why do we hear the advice so often that it pays to start saving early? The key: compounding. Dividend or interest compounding is simply the idea that, as our savings earn interest or dividends, those earnings are added to our total, and the next dividend is calculated on our new total. As a simple example, say you invested $100 at 2.5% interest. When your interest is earned, you’ll add $2.50 to your $100, for a new total of $102.50. Then your next 2.5% interest is on $102.50, which is $2.56, added to $102.50 is now just over $105, and so on. If your account compounds monthly, the total is updated every month, and you earn more as you go. 

To add to this strategy, we recommend in addition to your initial savings, that you add to your savings every month. Once again, the earlier you start the more months you have to save, and the more your savings will grow. As your life and career progress, the more you might earn enabling you to save more every month. All these factors can add up over time, with positive results. 

Our graphical example shows that if you start at age 20, with even with a small initial deposit and relatively small monthly contributions, a smaller investment can yield you more over time than if you waited until you were 40, with a much larger deposit and twice the monthly contributions. 


When Should You Start?

Everyone’s life is different, but the rule is to save as much as you can, as soon as you can, and keep up with your savings. Over time, compounding will reward you. Learn more about our Savings Account Options, and Save Smarter. 

Get Started
 

Dollars and Sense For Kids

April 12, 2019

Young girl making a purchase and learning the importance of moneyMoney experiences to teach your kids

Our friends at Balance Financial Fitness provide some helpful opportunities for teaching your kids financial lessons.

If you’ve been meaning to talk to your kids about money, April is the perfect time to start. In addition to Credit Union Youth Month, April 12th marks National Teach Children to Save Day.

This special day was created by the American Bankers Association to promote financial literacy among children. In the spirit of the occasion, here are three real-world experiences that parents can use to introduce kids to personal finance.


Have Your Children Make Purchases

Buying something is maybe the most direct way to understand how money works. That makes it a great opportunity for your children. Try including them the next time you make a purchase. 

Whether it’s at the supermarket or movie theater, give your kids cash to hand to the cashier, and then have them collect and count the change. (Note: This works best for cash purchases. Using a card may be a little too abstract.)

Lesson: Money is used in exchange for goods and services.


Open a Savings Account With Them

There’s no better way to explain saving money to a child than to open an account in their name for this specific purpose. It might be tempting to save time and do it online, but make it tangible by taking your child to your financial institution in person. Show them the physical building, point out the ATM, and have them meet the people behind the counter. Reinforce the roles that financial institutions play in managing your money. After the account is open, make a plan together for making regular contributions to it. 

Lesson: While piggy banks are cute, savings accounts are the best option for stashing your cash.


Inspire Them to Start a Business

There’s a reason why lemonade stands have stood the test of time. These micro businesses represent many children’s first exposure to earning money. If lemonade’s not their thing, encourage them to offer pet sitting or yard work to your neighbors. 

Lesson: Money is earned through work.

Source: Balance Financial Fitness March 2019


If you’d like help opening a savings account for your kids, just ask.


Learn more about the benefits of savings accounts for kids on our Youth Accounts page.

About Youth Accounts

 

Posted in: children, club, kids, money, saving

Manage Your Money With the 50/30/20 Rule

April 1, 2019

A Simple Rule for Long-Term Savings

Couple reviewing their finances.

What is the 50/30/20 budget rule? 

This simple, effective guideline, which has become more popular recently, can make managing your savings less stressful, and help keep your finances on track. The rule suggests dividing your (after tax) savings into three parts using that proportion 50/30/20. Spend 50% on your needs, spend 30% on your wants, and put 20% into long-term savings. This guideline is just that: a guide. You can adjust it as needed.


50% For Needs

Your needs are the expenses that “keep the lights on” and keep your life running. The necessities. Most bills fall into this category, including rent or mortgage; transportation, including car loan or lease payments; food and groceries; home, auto, health, and life insurance; medical expenses; utilities; and debt payments. Note that this doesn’t include entertainment or expenses like eating out. Some needs are not regular expenses, but may come up at some point in the future, like a new vehicle purchase, or major house repairs.


30% For Wants

Your wants include all the money you spend to make yourself happier or entertain yourself, outside of survival expenses. Non-essentials. Expenses like eating out, movies, sporting events, hobbies, vacations, or new clothes or décor that you don’t especially need to replace. There is often a fine line separating your needs and wants. It can help to list both in a responsible way, and make sure you know the difference between what you truly need, and what you simply want.


20% For Savings

Savings and investments would then receive 20% of your income. This can include a highly recommended emergency (or “rainy day”) fund, savings for eventual needs like your kids’ college, and longer-term investments like a mutual fund or IRA for retirement. While debt payments are considered needs, if you can, it’s recommended that you make extra payments or higher-than-required payments, which reduce your principle or total interest on a loan. This can be considered savings as well, since it reduces your future expenses. A great way to keep your savings growing is by automatically depositing or transferring your 20% to the right account from each paycheck. Another way to save automatically: participate in your employer’s 401K or IRA retirement plan (or start your own), especially if your employer matches any part of your deposit.


Embrace Change

Think of this guide as flexible, and adjust it to your lifestyle, current income, and debt. As your circumstances change, you can adjust your percentages. It’s a great place to start if you’ve always wanted a simple budgeting tool. 

When you’re ready to Save Smarter, start by learning more about all our savings options. 

Learn More
 

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