We wanted to know what Wall Street Journal readers are doing to prepare for the new year on money matters, so we asked them about their personal-finance goals and the steps they’re taking to meet them.
Here are some of his plans.
a habit, not an act
As a 20-year-old college student and personal-finance advocate, in 2022, I look forward to continuing to maximize contributions to my Roth IRA to take advantage of compounding, the eighth wonder of the world. In addition, I’ll diversify my passive income sources, stressing the importance of planning for the worst, expecting at least 20% of your portfolio to be in cash, and—most important—into yourself outside of the classroom. I will continue to invest. Help boost my investment returns and mindset, my most valuable asset.
Since market time beats market time, my goals are built around the concept of timing and working together. This year, I want to work on incorporating them into my lifestyle, to develop them as a habit, not just as a chore or task. Through this, I hope to inspire my fellow students to start early on campus and not rely on the institutional education system, which has no mainstream financial-literacy curriculum. Let’s break the money taboo and enjoy the portfolio process in 2022. It shouldn’t be hard when we are in complete control and have all the resources available at the click of a button in this day and age!
—Mia Gredelski, New York
Earn more income and be frugal
Finding and succeeding in a better paying job while keeping household expenses at current frugal levels. Continuing to grow my retirement savings contribution using dollar-cost averaging, and paying off the additional principal for our home loan.
-Ronald L. Bensley Jr., Renton, Wash.
ready to improve
My wife and I are both in our 50s, so unless there are some surprising sales at beachfront properties, we don’t expect to tap into our nest egg for more than 10 years.
In 2022, given the Fed’s promise to raise market multiples and rates, we’re just trying to be prepared for a correction without redeeming equities and heading to the financial bunker.
The challenge is, given inflation, it is expensive to hold liquidity in traditional risk-free assets. Not only do we miss out on further appreciation of the market, but inflation also takes it away, resulting in negative real returns.
So this year, for the first time, we are bringing in more liquidity in TIPS [Treasury inflation-protected securities] To reduce the effect of inflation.
If a correction occurs, we will lick our wounds with our equity portfolio like everyone else, but we will also be able to buy at “sell” prices available on growth names by selling off TIPS to rebalance.
And should inflation continue to grow without correction, hopefully our TIPS portfolio will at least maintain momentum.
—Tom Pontes, Boston
retirement ladder
I’m less than 10 years into retirement, so I regularly rebalance my investments and move money from stocks and mutual funds to cash. For 2022, I plan to use some of that cash to pay off my home loan. As interest rates rise, I will use the money from the cash and money fund to begin building up the CD and bond ladder at higher returns that will eventually fund my retirement.
-Richard Weimar, Baton Rouge, La.
no additional risk
My husband and I are aiming to maintain our current portfolio of stocks, bonds and real estate with a healthy cash reserve. Since we are both seniors, we have finally reached the point where we don’t need to take any more risks with our money. After decades of investing, we are in the best place to enjoy our wealth and our good health for as long as we can.
—Judy Brassaw, Bigfork, Mont.
a plan for equity
I am a retired biologist, not a professional trader. My goal is to maintain or increase my net worth through stock investments. I have worked in Stocks, Commodities and Options for over 30 years. I have a retirement account from which I get money every month. Half of that money goes into my brokerage account. My current portfolio consists of stocks of only large-cap companies with a long-term upward trend. I only trade out of stock after a year, when necessary. I would trade companies whose trend or stability is in question and others that show an upward trend for at least five years. I am diverse. I pay attention to both the fundamental and technical aspects of the companies I buy.
-Richard Demar, Newport, Tenn.
Self-insurance our risks
My goal is to grow the value of our portfolio faster than the annual rate of inflation and enough dividends and premiums from selling covered calls and cash-secured puts (which are options-trading strategies) to cover our living expenses. is to generate income. To accomplish this, I am increasing my exposure to stock risks by selling more puts and buying more dividend stocks and ETFs. Until recently, our stock investments accounted for about 30% of our liquid assets. With the increase in the sale of cash-secured puts, our cash available for trading has been reduced to approximately 40% of liquid assets. Being in cash means we are being taxed by inflation, but it protects against a sharp drop in equity prices. I think a 6% inflation tax is cheaper than a possible 20% to 50% drop in equity prices. In other words, we are using some of our cash to self-insure our risks. We don’t want to take big losses and stick with them for a long time as we are in our mid 70s and early 80s and have shorter investment horizon than younger investors.
-Donald E.L. Johnson, Jacksonville, Fla.
Three Step Plan to Increase Savings
My top personal-finance goal is to grow my savings. Step 1: Increase my savings rate every month. Step 2: Stop trading in and out of shares. Step 3: Identify and invest in a wide range of investment products, perhaps a high-yield savings account or mutual fund.
-James Carolina Jr., Estero, Fla.
a new asset allocation
I plan to rethink my diversification strategy and asset allocation. I’m 46 now and have been a disciplined investor since my first paycheck since I graduated in ’98. However, now that saving for a not-so-distant retirement is nearly “far away,” it’s time to reduce our exposure to US-focused equities and adjust our mix of current investments and future contributions.
-Steve Conway, New Albany, Ohio
a future in crypto
I want to build a powerful crypto portfolio this year. I have just started investing in crypto assets and am looking forward to a big change.
-Abhishek Srivastava, Pune, India
looking abroad
1) Buy a second home abroad, perhaps in Italy. The idea came from my wife, who is from Taiwan. I am browsing real estate online, mainly in Tuscany.
2) For 2022 we will see if it is worth adding to our crypto account. Living in Maui a few years ago, I went out every morning for coffee with a small group and a friend often brought the Internet of Things and cryptocurrency. At first I thought crypto investments were pure speculation. In 2021, I opened a small crypto account to learn more about it and I have changed my perspective.
3) Avoid using large portions of our core assets for second home or other purchases.
4) Stay Healthy – Got a booster last month.
-Bob Michaelson, Cape Coral, Fla.
Cut debt, save – and have fun
My top three goals:
Keep paying off my student loans. I have created a debt payment plan to make consistent weekly payments and aggressively reduce my debt.
Make the maximum contribution to my Roth IRA. I plan to contribute $115 per week to my Roth which will maximize the fund for the year and give me a great start to saving for retirement.
Start saving money for a house down payment. I have struggled to find a safe investment instrument to deposit cash that will give me a reasonable risk-to-return ratio and have sufficient liquidity. I’ve seen an ETF that’s designed to be a low-risk vehicle for a home down payment, but I find the net expense ratio of 0.60% to be a bit high for my liking.
Bonus goal: save enough to go on vacation with your girlfriend!
-Nicholas Nelson, Bloomington, Minn.
charitable match
My 2022 fiscal target is to be more liberal. I hope every personal splash this year with a gift to a charity addressing world hunger.
Like most grandmothers, I spend Christmas on things that my kids and grandchildren will enjoy but don’t really need. One day as delivery boxes piled up at my door, a humanitarian aid catalog arrived in the mail. What a disparity between those lives and mine. A pair of shoes will cost a pair of goats, providing a family with milk, meat and respect for the future.
So, I spent again and matched my Christmas budget, happily buying chickens, rabbits, goats, and a donkey. Then it happened to me, why not do it for the whole year? I don’t really need to buy six ducks to match the Black Friday Instant Pot. And whenever I use it, I will think of them—if I ever use it. I think knowing that an impulse purchase will cost twice as much would make me a more aware consumer. And maybe I’ll budget for a family vacation and combine it with a whole enclosure of critters that will help feed many families over the long haul. P.S. The grandchildren want to pick their own barnyard critters next year.
-Rose Williams, Columbia, Mo.
Never miss a story! Stay connected and informed with Mint.
download
Our App Now!!
,