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Memphis Retirement Planning

Memphis retirement planning involves understanding investment basics, such as what stocks, bonds, and dividends are. Do you know what a stock broker actually does? Or what a ticker symbol is? Understanding investment terms will make planning you retirement finances much easier.

Also, understanding how stocks work will make planning your Memphis, TN retirement easier. Knowing how exactly your money is invested can help you keep your Memphis retirement planning in perspective. If you don't know much about investing, understanding stocks is a good place to start, and it will help you start to consider investing from a broader perspective.

Learning Basic Investment Terms

A ticker symbol is a short abbreviated name for a stock or other security (kind of like TN stands for Tennessee). For example, General Electric is GE, and Coca-Cola is KO. It's called a ticker symbol because it was originally printed on ticker tape (in a ticker tape machine). In the investing world, stocks are often listed with their ticker symbol.

A dividend is a sum of money that's returned to the stockholder when the company earns a profit. Not all stocks offer dividends. It's not necessarily a good idea to purchase a stock just because it offers a high dividend, as that dividend may go down unexpectedly (and, you may be better off re-investing that dividend). Still, dividends may be worth considering as a potential source of income during your Memphis retirement planning.

A dividend yield indicates how much you should collect in cash dividends, based on what you invest in a stock. For example, a stock with a %5 dividend yield would by $5 each year for every $100 you invest. Including some high dividend yield stocks in your Memphis retirement portfolio is probably a good idea. Again, you don't want to rely exclusively on dividends for your Tennessee retirement, but they can be a decent source of income.

The dividend payout ratio of a company is the amount of profit that goes to the shareholders in the form of dividends. If this percentage is too high, investors may worry that there isn't enough left for growth. Good, mature stocks will have a decent dividend, but the dividend payout ratio shouldn't be more than around 60%.

Capital gains tax is important to understand as a new investor. Holding onto certain assets for the appropriate length of time, or in the right account, can be very beneficial. A capital gain is the profit you make when selling an investment. You may want to talk to a Memphis financial planner about the specifics for capital gains taxes, because with a little planning you can avoid paying extra taxes.

Obviously, the terms above only represent a tiny fraction of all the Tennessee investment planning terms out there. However, vocabulary is a good place to start. You need to know the words in order to speak the language, right? When you're ready to consider Memphis retirement planning, it's a good idea to start with basic investment terms.

Beginners Guide to Stocks

Tennessee stock brokers are licensed professionals who buy and sell stocks, as well as bonds and mutual funds. Stock brokers typically charge a small fee. Note that stock brokers and different from Memphis financial planning professionals. Stock brokers simply manage funds through a brokerage account.

You don't need a stock broker to buy a stock; you can do it on your own, directly. Then, you get your own dividend checks, and you don't have to worry about your broker going bankrupt. Of course, it is more difficult to buy and sell stocks on your own, and it may be easier to have a Memphis, Tennessee stock broker working on your behalf.

Also, working with a Memphis retirement planning specialist can help you choose the appropriate stock options when your planning your portfolio. You should certainly have some stocks in you retirement account, but you should also have other kinds of investments. A Memphis retirement planning specialist can explain to you what percentage of your account should be composed of stocks.

A stock is basically a piece of a business. You buy stock and it represents ownership in a business. Historically, stocks have produced long-term gains, which is one reason it's good to purchase stocks early on in your Memphis retirement planning. Stocks are an essential part of Memphis retirement planning.Over the long-haul, stocks tend to beat inflation, and so they are also a reliable component of long-term Memphis retirement planning.

Of course, stocks have some risks that you need to take into account during your Memphis retirement planning. In the short term, stocks can experience greater losses than bonds or cash. So, stocks should generally only be purchased if you're planning on holding onto them for awhile, and you don't need to access the cash anytime soon.

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Retirement Planners In Memphis

Rik Ditter
Rik Ditter
6242 Poplar Ave.
Memphis, TN 38119

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