The development of Multiply, SMI’s new video-based investing study, led us to create new support materials to help Multiply small group or workshop participants act on the ideas they learn. These new materials are potentially useful to all investors, not just Multiply participants, which is why we’re making them freely available to all SMI members and visitors.

Here’s a brief description of these new materials and how they may be helpful to you.

  • Personal Investment Plan Template
    SMI has long advocated that investors develop and follow a written investment plan because, as the Bible teaches, “The plans of the diligent lead to profit as surely as haste leads to poverty” (Proverbs 21:5).

    Premium members who have signed up to use the online MoneyGuidePro® software (one-time $50 fee) have access to a highly sophisticated planning tool. Those who haven’t yet signed up for MoneyGuidePro® can use SMI’s new Personal Investment Plan Template to develop a simplified plan.

    Financial planning is profitable in numerous ways. First, developing a plan will help you think through and make the best decisions about your investments. Second, if you’re married, the process of completing the Personal Investment Plan Template will foster communication and joint decision making. Third, if one of you dies, the surviving spouse will have a record of the details of your investment plan, which will help him or her continue implementing the plan. Fourth, when the market gets a little crazy, as it’s prone to do from time to time, being able to refer back to what you wrote in calmer times will help you stay with your plan.

    With SMI’s new Personal Investment Plan Template, you’ll be prompted to think through your investment goals and put them in writing, articulate your investment strategy, determine your optimal asset allocation, and run numbers to see how much you should invest each month to meet your goals.
     
  • Sample Market-Events Statement
    When the stock market gets especially volatile, it’s essential to have made a decision in advance as to what you will do — or not do — with your portfolio in response. Otherwise, your emotions are likely to take over — which tends to lead to counterproductive investing decisions that hurt long-term results. At the end of the Personal Investment Plan Template you’ll be prompted to write “future instructions to yourself” via a market-events statement.

    Ideally, this statement would articulate your commitment to sticking with your investment plan. It should reinforce that you have chosen a strategy well-suited to your investment time frame and your temperament — i.e., a plan you can live with in good times and bad. The statement should clearly detail your rationale for choosing the strategy you are using. SMI’s Sample Market-Events Statement is meant to be a starting point and guide to help you write your own such statement.
     
  • (Almost) Everything You Need to Know About IRAs
    At first glance, an Individual Retirement Account (IRA) seems straightforward enough. You can put up to $6,000 per year into such an account ($7,000 if you’re 50 or older), choose from a wide variety of investments, and build a nest egg for your future. However, there are two types of IRAs (traditional and Roth), each offering specific tax benefits and governed by its own set of rules. An individual’s personal circumstances will influence which type of IRA is most advantageous.

    This new SMI resource helps simplify the decision-making process by first helping you determine whether you are even eligible to make tax-advantaged contributions to an IRA. The answer to that question depends on your income and, in the case of a traditional IRA, whether you’re covered by a workplace retirement plan. (Even that can be confusing — for example, what does it mean to be “covered” by a workplace plan? This new resource explains.)

    Assuming you’re eligible to contribute, you’ll learn which type of IRA may be best for you, whether a stay-at-home spouse can contribute to an IRA, how much you can contribute overall, and about the unique benefits of a Roth IRA.
     
  • 401(k)/IRA Decision Tree
    If your employer offers a 401(k) or similar retirement plan and you earn too much to be eligible to contribute to an IRA, your choice of which vehicle to use for retirement savings is simple — use your employer’s plan. On the other hand, if your employer doesn’t offer a workplace retirement plan, use an IRA. But what if both are true — you have access to a 401(k) plan at work and you are eligible to contribute to an IRA? In that case, which one should you choose? SMI’s new 401(k)/IRA Decision Tree will help.

By answering a series of questions, you’ll be led to the best course of action. Among the factors taken into consideration: Does your employer match your contributions to the workplace plan? And do the investment options offered through the plan enable you to invest as you’d like to?

You’ll also see that in some situations, the best decision isn’t to choose between two kinds of retirement accounts. Sometimes the best course of action is to use both. The Decision Tree explains how to utilize both options and prioritize between them.

You can find each of these new tools in the Resources section. We hope you find them helpful.