double-digit returns. “Whatever is the big investing idea today, it’ll be something else next week,” says Baker. “Just because it was hot yesterday doesn’t mean it’s the right thing to do now.”
7. Stay Fit
Have you noticed that more and more corporations are starting wellness programs to encourage things like physical fitness and healthy eating? Sorry to say, but it’s probably not because they care a whole lot about you. It’s because it’s going to save them money … a lot of it. Being proactive and instilling positive changes now, as opposed to paying for costly medical issues down the road, just makes sense for company health plans.
The same principle applies to you personally. In America’s confusing and dysfunctional healthcare environment, the best thing you can do to stave off medical bills in the future is to look after yourself right now. Otherwise, you might face a condition like diabetes, which now affects 11% of African American men and more than 13% of African American women. That could not only destroy your quality of life but erode your career potential and throw your financial plans off track.
“Being healthy is a huge part of our long-term plan,” says Clark, whose fitness regimen as an athlete has extended into his post-basketball life as well. “I work out four days a week. I watch what I put into my body. It not only keeps you healthy, it gives you the energy you need for other things in life.”
8. Get to Know Uncle Sam
It’s not seditious to say there’s no reason to pay the IRS any more than you have to. In fact, you should take every legitimate avenue possible to reduce your taxable income every April 15.
First, take advantage of all tax-sheltered vehicles available to you. That means 401(k)s, traditional IRAs, and even 529 college-savings plans, many of which offer tax incentives for in-state residents. Flexible-spending accounts also fall under this umbrella, because they allow you to use pretax cash to pay for non-covered medical expenses.
Next, be aware of every deduction available to you as a taxpayer, including recent changes and additions. For instance, parents with children in college and self-supporting students can now claim $4,000 in higher-education tuition and fees. Or if you’ve made energy-saving changes to your home, you get a 10% tax credit up to $500.
On the investment side, remember you can claim investment losses up to $3,000 in any given year. And if you’re donating stock to charity, know that you can claim its full value on the day of your contribution—not just what you bought it at originally. “For a tax-efficient portfolio, consider low investment turnover, index funds with low capital-gains distributions, and perhaps tax-free municipal bonds in your brokerage account,” says Vanguard’s Stafford.
9. Keep it Simple
Here’s a dirty little secret of the investment business: Indexed mutual funds clobber actively managed funds. Your odds are far better if you just plunk your money in a simple fund that tracks the entire stock market. No mess, no worry.
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