Investing 101

Looking to pass down assets to the next generation? That’s building generational wealth and it’s usually passed down in the form of cash, investments, properties, etc.

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Your primary income is earned through your main career or job. If you want to generate additional income, this can be earned through a side business, royalties, investment, dividends, etc. Be sure to measure the risk of whether you can afford the time, money, or effort these actions require.

Financial security means having the savings and diversified investments to weather through emergencies or financial hardships.

Financial independence means being able to live comfortably without working because of your savings, passive income, and other investments.

Financial freedom means having such a strong financial foundation that you no longer have to worry about the cost of goods or services.

This goal is for people who want to reduce their financial portfolio’s volatility. It may help increase returns and reduce risks, depending on market volatility. Always talk to a licensed financial planner or investment advisor first about diversification strategies.

When you retire, if you want to have supplemental income to your monthly Social Security income, advanced planning is incredibly important. Common retirement planning includes participating in a 401(k), 403(b), or 457(b) through your workplace. However, if you’re a Californian without access to these plans, you can open a retirement savings account with a financial institution or via CalSavers.

If your goal is to save for your child’s future education or vocational training, there are a variety of college savings plans to choose from, known as 529 plans and many are even tax-free. For more information, check out ScholarShare 529, California’s 529 savings program.