www.mozilla.com Weather Central
Voices
Headlines

Roberts not the answer -10/30/2014, 10:25 AM

See the signs -10/30/2014, 10:23 AM

Incumbents always win -10/30/2014, 10:23 AM

Convention center -10/30/2014, 10:23 AM

Schodorf for SOS -10/30/2014, 10:14 AM

Supermarket shenanigans -10/29/2014, 10:19 AM

Americans can fix the Senate -10/29/2014, 10:19 AM

A plea to city commissioners -10/28/2014, 8:58 AM

Having no price tag -10/28/2014, 8:58 AM

Leiker understands -10/28/2014, 8:58 AM

Justice doing his job -10/28/2014, 8:58 AM

Kansas and Greg Orman -10/28/2014, 8:58 AM

'Surplus' KDOT money needed in western KS -10/28/2014, 8:58 AM

Ready for a budget spin -10/28/2014, 8:58 AM

Dishonest mailing -10/28/2014, 8:58 AM

Changing Republicans -10/27/2014, 10:02 AM

Follow the votes -10/27/2014, 10:02 AM

Shameful attempts -10/27/2014, 10:02 AM

Slanderous ads repulsive -10/27/2014, 10:02 AM

Medicare experiment -10/27/2014, 10:02 AM

Profile, or die -10/27/2014, 10:02 AM

Important issues -10/27/2014, 10:01 AM

Politics at their finest -10/27/2014, 10:01 AM

Most important election -10/26/2014, 4:02 PM

Enough is enough -10/26/2014, 4:02 PM

Is Roberts on final lap? -10/26/2014, 4:02 PM

Democrat turned Brownback supporter -10/26/2014, 4:02 PM

Editor Bradlee; For it All, 'Thank You' -10/26/2014, 4:02 PM

Davis for governor -10/26/2014, 4:02 PM

Roberts a changed man -10/26/2014, 4:02 PM

Time to stay the course -10/26/2014, 4:02 PM

Embarrassing economists -10/24/2014, 9:13 AM

Sherow for House -10/24/2014, 5:07 PM

It can't get crazier (wanna bet?) -10/24/2014, 9:04 AM

Digital distractions -10/23/2014, 10:01 AM

Orman for Senate -10/23/2014, 10:01 AM

Federal persecutors -10/23/2014, 10:00 AM

More ed cuts coming -10/22/2014, 5:38 PM

Leiker is the answer -10/22/2014, 5:38 PM

Sun shining on schools? -10/22/2014, 5:38 PM

Airline a great addition -10/22/2014, 5:38 PM

Huelksamp: ideologue extraordinaire -10/22/2014, 5:38 PM

Kids do count -10/22/2014, 10:31 AM

Needing the past in the future? -10/22/2014, 10:31 AM

In praise of hunting -10/22/2014, 10:30 AM

What is a CID? Will it work for mall? -10/21/2014, 10:22 AM

Judging importance on the ballot -10/21/2014, 10:22 AM

Kansas Speaks -10/21/2014, 10:22 AM

Paying for schools -10/19/2014, 1:21 PM

Joining forces for Orman -10/19/2014, 1:21 PM

Research before voting -10/19/2014, 1:21 PM

Davis is moderate? -10/19/2014, 1:21 PM

The most important election in your lifetime -10/19/2014, 1:21 PM

Huelskamp stands out -10/19/2014, 1:21 PM

Kansas farm interests -10/19/2014, 1:21 PM

Keeping unfounded reports from 'going viral' -10/19/2014, 1:21 PM

The age of cynicism -10/18/2014, 9:02 AM

Preventable diseases -10/17/2014, 10:28 AM

Second term needed -10/17/2014, 10:28 AM

Kansans deserve better -10/17/2014, 10:28 AM

Officially killing Americans -10/17/2014, 10:27 AM

New era at FHSU -10/16/2014, 10:01 AM

Roberts is right choice -10/16/2014, 10:01 AM

Crumbling Constitution -10/16/2014, 9:52 AM

Redbelly's future -10/16/2014, 9:52 AM

Kansas deserves better -10/15/2014, 10:23 AM

Remember to vote on Nov. 4 -10/15/2014, 10:23 AM

You almost feel sorry for Sean Groubert -10/15/2014, 10:23 AM

Register to vote -10/14/2014, 10:14 AM

Living on that 70 percent -10/14/2014, 10:14 AM

New bullying problem for schools: parents -10/14/2014, 10:14 AM

Cheerios, marriage equality, the Supreme Court -10/13/2014, 9:49 AM

Wedded bliss -10/12/2014, 5:54 PM

Who is the real fraud? -10/12/2014, 5:08 PM

Teenagers 'make some noise' -10/12/2014, 5:08 PM

Not so private property -10/10/2014, 10:01 AM

Federal funding -10/10/2014, 10:01 AM

Teacher indoctrination -10/10/2014, 10:01 AM

Vote Republican -10/9/2014, 9:49 AM

Non-partisan politics -10/9/2014, 9:49 AM

Teen driver safety week Oct. 19 to 25 -10/9/2014, 9:04 AM

FHSU party -10/9/2014, 10:11 AM

Poverty in America -10/9/2014, 10:11 AM

Let the women serve -10/9/2014, 10:11 AM

Time for new direction -10/8/2014, 9:49 AM

Improving Kansas economically -10/8/2014, 9:35 AM

Water abusers -10/8/2014, 9:35 AM

Play safe on the farm -10/8/2014, 9:34 AM

Where the money comes from -10/7/2014, 10:24 AM

The president's security -10/7/2014, 10:24 AM

Marriage equality -10/7/2014, 10:24 AM

The sins of the father are visited -10/6/2014, 9:02 AM

Cannabis in America: The bottom line -10/6/2014, 9:20 AM

A reason to celebrate -10/6/2014, 9:20 AM

Gov. shields wealthy from paying for schools -10/5/2014, 2:07 PM

Passionate protest in defense of civil disorder -10/5/2014, 2:07 PM

October is time for baseball and, of course, film premieres -10/4/2014, 2:16 PM

Alley cleanup -10/3/2014, 10:01 AM

Will the West defend itself? -10/3/2014, 10:01 AM

Find another school -10/3/2014, 10:01 AM

myTown Calendar

SPOTLIGHT
[var top_story_head]

Pay yourself first

Published on -6/1/2013, 3:27 PM

Printer-friendly version
E-Mail This Story

Mutual funds, stocks, bonds, REITs, annuities, real estate, 401(k), 403(b), traditional IRA, Roth IRA, CDs -- the list can go on and on. These are all vehicles that can be used to pave the way for a financial future.

Your financial future could include dollars that are required for a purchase in a year, or to fund college education for your children, your own retirement, death, disability. Again, the list goes on and on.

However, before we get into the vehicles that might assist in a savings plan, it is very important to understand a simple formula in order to attain your goals successfully.

Any investment that is implemented depends on 3 ingredients: Your dollars, time, and some sort of rate of return.

A simple formula for saving for the future could be to live on 90 percent of your income, and save 10 percent. Unfortunately, in today's world, many are living on 110 percent of their income and not saving at all. This is the reason so much of our U.S. population is strictly dependent on a government check -- that's kind of sad in this "Land of Opportunity."

And the sooner this formula is adapted, the better, as time is one of the ingredients to your success. For every year you wait to save on a disciplined basis, the future becomes more and more bleak, financially speaking.

Whether you have a $30,000 income or a $300,000 income, the formula stays the same. The key to this strategy is to pay "yourself" first. Surprisingly, the rest of the bills get paid, but instead of being on the bottom of the list, you move yourself all the way to the top. You are the first bill that is paid each paycheck.

Obviously, a bank draft or payroll deduction is the best way of making this happen, as what you can't see, you can't spend. But whatever way it's done, having a disciplined savings plan (even if it's for next year's vacation), helps achieve your goals.

Once this formula is in effect, then we can start looking at the strategies that best serve your particular needs. If you are saving for retirement, we would use different vehicles than we would use if you needed the money in 6 months.

The rate of return, the last ingredient to our savings plan, then comes into play. However, looking at the tax consequences that go along with a rate of return is important, too. It's really not what you make, but what you keep, that counts in the long run. So if your particular investment has a rate of return of 10 percent, but you're giving 3 percent back to Uncle Sam, then your true net return is really 7 percent.

There are strategies available that make your money work more efficiently, and also can be used to address more than just one aspect of your financial plan, instead of each dollar focusing on just one particular goal.

In summarizing, the key to a successful long-term savings plan is to live within your means. It's easy to want everything right now, but most people start with humble beginnings.

And many people have retired successfully with incomes that never exceeded $25,000 a year. How did they do it? They simply adjusted their standard of living to meet their incomes, paid "themselves first," and became responsible for personally subsidizing their retirement income.

They're not living like kings and queens, but they didn't live like kings and queens throughout their working years. Adapting to your own incomes, paying yourself first, and allowing your dollars, time and compound interest to work for you will help in making for a very successful financial future.

* Next month: There's more to retirement than money.

Tim Schumacher represents Strategic Financial Partners in Hays. tschumacher@htk.com

digg delicious facebook stumbleupon google Newsvine
More News and Photos

Associated Press Videos