6 key areas and the profitable moves you can make in 2007

December 29, 2006 at 3:14 pm Leave a comment

Money Magazine listed the 6 best financial moves for 2007. Here’s the breakdown:

1. Investments:

  1. Vanguard Growth Index: broadly diversified portfoliio of big growth stocks
  2. iShares S&P 500 Growth Index ETF: trades like a stock, but cheaper if you buy in large dollar amounts infrequently (good if you invest a little each month)
  3. T. Rowe Price Blue-Chip Growth fund: if you prefer to invest with a manager who picks stocks
  4. For stock investors, consider General Electric, Schlumberger and Texas Instruments.

2. Home Buyers:

  1. Home prices have dropped 2.2% in 2006, so, if you’re thinking of buying and have found the house you want, start the bid at 15% below the asking price.
  2. Depending in your area, paying a buyer’s agent an agreed-upon fee can help lower the cost of buying a home. The agent will serve as a dedicated negotiator which will save you money on the purchase.
  3. Consider buying from a builder and getting a second opinion.

3. Home Sellers:

  1. Don’t let ego or memories distort the value of your house. Go to open houses of similar properties and decide what you would pay. List your property for that price.
  2. These days, an upgraded kitchen or bathroom won’t get more money. The new kitchen or bath will sell your house, but it won’t gain more than the neighbor without the upgrades.
  3. Consider staging the house or maybe even rent to sell.

4. Tax Return:

  1. If you get a tax return this year, think about doing a direct deposit into an IRA.

5. Savings:

  1. Lock in a long-term high yield CD while rates are high.* (As high as 5.5%).
  2. Consider short term bonds, paying off credit card balances**, and refinancing your home to a fixed rate.

6. Energy:

  1. Gas prices aren’t getting any lower. “To save at the pump, be smart at the wheel.”

*MoneyTalk doesn’t endorse CD’s for short term savings. It’s a good idea to have easy access to savings for emergencies or large purchases without penalty, which is why we endorse Money Market Account or online savings accounts with ING or Emigran Direct who have direct access to your checking account.

**Paying off high interest and unsecured debt is the best way to save money. Not only are you saving money from interest payments, but you are freeing up money that could go into a money market account or Roth IRA.

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Entry filed under: Money Fun.

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