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BBQ Ribs And Investment Strategies

I spend a fair amount of time in AZ, NY and Tennessee. Being a foodie, one weakness I have is for Southern food: especially BBQ and Ribs. Now, the preparation of ribs are a definitive process, made very differently depending on where you are. South Carolina, Tennessee, Texas, Southwest region, Northeast- all prepare their ribs in different ways: dry or wet, vinegar or tomato based, varied spices, different ways to smoke get the idea. Depending on where you are, the ribs can be oh-so-good but prepared very differently.

So what, you ask, does this have to do with investment strategy? Plenty...the variations in strategies vary greatly with the different people, geography, goals and objectives not unlike the preparations of really good ribs. Growth or income, conservative or aggressive, saving for specific purchases, not having enough to get through the month or more than enough to not need the use of the account- there are so many variations from person to person, family to family. So what do you do to find the commonalities in the variations? You dig, you plan, you get the idea.

There are some similarities in everybody's financial plan, needed to determine the facets of your organized investment strategies to assist in attaining your objectives. The first is to look at the tax ramifications of the account: is it a general investment account, or slated for retirement -are you utilizing a before tax or after tax strategy? In the retirement world, a Traditional IRA utilizes a before tax advantage: you make your tax deductible contribution of $5000 a year, $6500 if you are over the age of 50, and get to reduce your gross income and your taxable income by that amount in the year of contributions. The drawback is it's all taxable when you withdraw the funds later on. The opposite, a Roth IRA, utilizes after tax contributions- you pay your taxes now, and the growth of the account is tax free when you withdraw it. No different from South Carolina BBQ and Texas BBQ- both ribs, both very different though. Time period- how long is the investment for? Investments situated for a short term goal are and should be different for those placed for a long term goal. Liquidity and marketability are a sure fire issue to consider...can you turn the investment back into cash dollar for dollar like a money market account (liquidity) or for the fair market value of the investment on the day of sale (marketability)? Risk- different for everybody, and neither is right or wrong. Generally, with risk comes reward (hopefully) and with reward comes risk (again, hopefully). Lastly, but not totally inclusive, is diversification. Do you have all your eggs in one basket, or do you have them spread out amongst various asset strategies so that they don't all move in the same direction as the market moves. Asset allocation is a totally different issue, and I will take it up in a future article.

A financial plan or investment strategy is as different as the people who utilize them, and the preparation of great BBQ ribs. My best advice is if you are not up to date on the differences in all the investment opportunities available to you and how they are affected by economic conditions, it's time to get professional help. You don't pull your own tooth, nor represent yourself in a legal matter. Find yourself a tenured, experienced Certified Financial Planner™ and work together to plan your future...then you'll have time to find the best BBQ place in town or get in an extra round of golf every week. For me...see you on the tee!

For more information on Neal's take on Life, Love and Money, just call the office to get his book, "Tales From the Chestnut Tree" at a discounted rate for all our readers. Just call the below number and we'll hook you up...happy reading!

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