One of the US well known personal finance advisor is Suze Orman and if you have not seen her on TV you can check out her website for the tools and resources and other material. One of  her book is called The Money Class – Learn to Create Your New American Dream published by Spiegel & Grau, New York, 2011. In it Suze asks people to live within your means not your credit. We all have hopes and dreams which is the reason why you want to wake up in the morning; being financially independent or not in debt makes life easier. Often Suze will talk about your grandparents, she means the people who lived through the depression when credit was very hard to get, cash was hard to come by and living was frugal. The ending of the war changed and houses were affordable, partly due to government assistance. It seemed money went further. Now days, houses and cars and everyday life seems more expensive; credit is relatively easy to have and use. Suze recommends live below your means but within your needs. Part of that is to understand the difference between a want and a need. On Valentine’s Day in the part of the northeast where this is written it is cold, a want is warmer weather, is it a need?

In the book Suze offers very good advice concerning your family, home, and moving towards retirement. It is the last section which this blog will focus on – what to do with the money you are putting away for retirement. There are a great number of choices in the marketplace – the easiest thing to do is stick to dividend paying ETFs. The fees are lower than a full service; many full-service funds perform very similar to an index fund, but you pay a higher fee. You earn money through the dividends and through long term capital appreciation (higher stock prices) the companies are easy to found through Standard & Poor Aristocrats index of firms – over companies have similar indexes. Some range from increasing dividends from 10 years to 25 years. This means one of the best methods to gain wealth is not to lose it.

Linking to dividend paying stocks, whether you choose the index or go with individuals stocks that make up the index, it is up to you. The important aspect with index funds is every year they or 6 months they rebalance the holdings which means the laggards are let go and winners are kept to continue winning.  One of the hardest things to do is sell when you believe there is more upside to come. Invest in the long term but make your money grow through dividends and capital appreciation.

There are more questions than answers, till the next time – to raising questions.