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Financial Fitness Blog

What kind of investor are you?

(Retirement) Permanent link

Michelle Blog PhotoAre you a conservative or an aggressive investor? Find out with our risk assessment tool.

Before you consider any investment, it is important to understand risk and to determine how much risk you’re willing to take with your investments. Risk can be defined as the possibility of losing all or part of your investment. Investment professionals generally accept the notion that the potential for higher returns goes hand-in-hand with higher risk. Conversely, low-risk investments are associated with lower returns. Naturally, you would like to get the highest possible return on your investments, but the appropriate allocation of your money depends on your risk tolerance.

As you move into different stages of life, your circumstances may cause your risk tolerance to change. For instance, when you are young and just starting out, you have time on your side. Time allows you to look at riskier investments with the potential for higher rates of return because you have time to “ride-out” a market downturn.

In mid-career—and increasingly as you approach retirement—you may feel the need for more nest egg protection, thus your tolerance for risk may be lower. Reassessing at this time will identify whether your risk profile has changed and the impact on your investment portfolio.

Our risk assessment tool uses your responses to 13 questions to determine what type of investor you are by assessing your tolerance to risk. Once you understand your risk tolerance, you can choose a mix of investments appropriate for your personal situation.

Your risk assessment results are based on your answers to questions about objectives and goals, timeline for using the money, current life situation, investment experience, and style.

The risk assessment tool will automatically calculate your score and tell you what kind of an investor you are. It will also suggest an appropriate asset allocation for your particular profile, identifying what percentage you might allocate to fixed income, small-cap, mid-cap, large-cap, and international/global investments.

Michelle Slawny, CFP®

Flood insurance Q&A

(Insurance) Permanent link

Mark Blog PhotoIn June 2008, torrential rains caused more than $765 million in damage to property and crops in Wisconsin. More than 25,000 homes and businesses that registered for disaster assistance with the National Flood Insurance Program (NFIP) did not have flood insurance.

Flood insurance is available to homeowners, renters, condo owners/renters, and commercial owners/renters. Here's a few Q&As to help you decide whether to purchase flood insurance.

Q: Does my home insurance cover flooding?

A: No. Flood insurance is not typically covered by a home insurance policy.

Q: If my home is flooded, won't federal disaster assistance pay for my damages?

A:  Federal disaster assistance is not always available.  When federal aid is made available, it usually takes the form of a low-interest loan that individuals must repay in addition to their existing mortgage. 

Q: Am I eligible for flood insurance?

A: You must live in a community that participates in the National Flood Insurance Program (NFIP) to qualify for National Flood Insurance. Find out if your community participates at floodsmart.gov.

Q: I live in a low-risk flood zone. Do I really need flood insurance?

A: It's a good idea to buy flood insurance even if you live in a low- or moderate- risk area. Nearly 20% of all flood insurance claims come from areas with moderate-to-low flood risk.

Q: I'm not in a high-risk area, but I'd like flood coverage. Is this possible?

A: Yes, you are eligible to purchase a flood policy with the same coverage you would receive if you lived in a high-risk area. That is, as long as your community participates in the NFIP.

Q: Who do I contact if I want to purchase a flood insurance policy?

A: The NFIP has an arrangement with private insurance companies to sell and service flood insurance policies. Visit floodsmart.gov for a list of insurance companies that sell and service NFIP flood insurance policies.

Keep in mind that there is typically a 30-day waiting period from date of purchase before a new flood policy goes into effect.

Source: FEMA, floodsmart.gov

Mark Dannehl, Personal Insurance Consultant

Shape up: Get financially fit during National Financial Literacy Month

(Money Management) Permanent link

Michelle Blog PhotoHere are thirteen things you can do to improve your financial condition and sense of well-being. 

1. Create a budget

A budget allows you to take control of your financial future. It can help you find ways to cut expenses, carving out some extra money for debt payments, retirement savings, and beefing up your emergency fund. Payroll deduction and automatic withdrawal options are great budget helpers.

2. Pump up your knowledge base

Make it your mission to register for our free "Mission Impossible" financial seminars, July 20 - August 14. Or check out our full schedule of seminars…live, live online, and on demand. Seminar schedule.

3. Reduce stress with an emergency fund

Start an emergency savings account to cover unexpected expenses. The stress of financial emergencies will be diffused just knowing you have money set aside, and it will keep you from needing to take on credit card debt.

>>Click here to read the rest of the tips. 

Michelle Slawny, CFP®

Take our Debt Diet Challenge

(Money Management) Permanent link

Michelle Blog PhotoIt's National Financial Literacy Month! What are you doing this year to improve your financial condition and sense of well-being? Here are a few ideas to help you go on a Debt Diet.

  • Stop using credit cards. Cut them up, taken them out of your purse or wallet, or freeze your cards in a glass of water. (It’ll make you think twice about whether you really need the card.)
  • Stop the flood of credit card offers. Call 1-888-5-OPTOUT or go to optoutprescreen.com to get off the mailing lists that the credit bureaus sell to credit card companies.
  • Write down the balances for each credit card along with the interest rate. Develop a plan to pay off what you owe. Generally, start paying off the cards with the highest interest first. If you want a quick boost, pay off the card with the lowest balance first.

>>Check out our credit card and debt management calculators.

Michelle Slawny, CFP®