Expert: Paul Henneman - 4/27/2009

Question
Am 27 years old with two daughters both at the age of 2 years and a half. How do i invest and save for all of us for the future . I make an average of  $ 1200 a month.

Answer
Fuata,
   I would suggest that you simply budget a specific amount that you try to save each month. Save as much as  you can, but make the amount realistic and something that you can continue to do for many years to come. Saving takes a large amount of discipline and often decades to achieve anything good.
   You could put these funds into a retirement account, I would suggest that you set up a ROTH IRA account for this. You can set this up at any of the online brokerage firms, such as scottrade.com or Etrade.com  Be sure to select the ROTH IRA account, as there are very large tax advantages.
   Another thing to look into is investment grade life insurance, specifically a Whole Life Insurance Policy. This type of investment does two things. First, it provides life insurance so if something ever happend to you, your daughters would receive a large payout.  The second thing that this type of life insurance does is grow like a financial investment. Whole Life inurance typically is very stable in that there is a minimum return you would receive in the worst performing years, and a higher return in better years. But your policy would grow every year.   For example, you could get a $100,000 whole life policy that would pay $100,000 to your family if anything happend to you. It would cost somewhere around $50 a month, but that depends greatly upon your age and current health. More importantly, their is a cash value associated with a life insurance policy that grows over time based on your payments and the returns given by the insurance company. After a thirty or forty years, this amount could be in the hundreds of thousands.  You can withdraw against this cash value, usually tax free.  It is a great long term investment, with major tax advantages, and little to no risk.  
   If you are interested in Life Insurance, look up an agent in your area for any of the major firms. Northwestern and Farmers are two examples. Make sure that it is a large and stable company, that will be around to service your policy for decades to come.

I hope that this helps. Please do not hesitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com