Financial guru Rachel Crews is an investing guru who’s always willing to give advice to help others do the same, and in a recent video posted to her popular YouTube page, she detailed her yearly investing routine.
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Here are the five things Rachel Crews says you should do with your investments every year.
Annual Expert Review
Every January, Cruz and her husband meet with an investment professional to review their investments from the previous year and make a plan for the following year.
Why it matters: An investment professional can offer expert advice, help you see things from a different perspective, and potentially suggest changes to optimize your investment strategy.
How to apply this: Schedule an annual meeting with a qualified financial advisor or investment professional to review your portfolio and discuss your financial goals.
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Maximize your retirement accounts early
Cruz and her husband aim to max out their Roth IRA and 401(k) plan early this year, preferably in January.
Why it matters: Investing at the beginning of the year gives your investment the chance to grow over the course of the year, making the most of the power of compound interest (compound interest and compound interest are arguably the two most beautiful words in the English language).
How to apply this: If possible, frontload retirement savings at the beginning of the year. If that’s not possible, set up automatic contributions throughout the year and invest consistently. Consistency is key.
Utilize separate retirement accounts
Cruz and her husband maintain separate retirement accounts, including individual Roth IRAs, 401(k)s and health savings accounts.
Why it matters: Having separate accounts is extremely convenient for couples, as it allows each individual to take advantage of their contribution limits and maximize their retirement savings. It’s a win-win!
How to apply this: If you’re married, make sure that both you and your spouse maximize contributions to your own retirement accounts, if possible.
Focus on long-term growth
Rather than obsessing over the day-to-day fluctuations of the market, Cruz and her husband review their investments annually and call it a day.
Why this matters: Checking your investments too often can make you feel caught up in market changes and need to change your strategy. Instead, try not to check them too often and focus your energy on long-term growth.
To apply this, hide your login information. Resist the urge to check your investment accounts frequently, and instead put a date on your calendar to check them each year.
Consider advanced strategies (for high-income earners)
Cruz encourages people in their asset-building years to use strategies like a “backdoor Roth,” which is available to high-income earners who exceed the income limits for direct Roth IRA contributions.
Why it matters: This allows high-income earners to still enjoy the tax benefits of a Roth IRA.
How to apply this: If you have a high income, consult with a tax professional or financial advisor to determine whether an advanced strategy, such as a Backdoor Roth, is appropriate for your situation.
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This article originally appeared on GOBankingRates.com: Rachel Crews: 5 Things to Do with Your Investments Every Year
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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