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Smartest Money Moves for Boomers

Day trading ... buying disability insurance ... are these worth it?

LifeZette has teamed up with the pros at Dave Ramsey to address your most pressing money issues and concerns.

Once kids are grown or well on their way, and a family has some financial flexibility — many adults begin thinking about financial investments to help secure their futures.

Personal finance experts Rachel Cruze and Chris Hogan help with some questions posed by boomers. Rachel Cruze is co-author of the No. 1 New York Times best-selling book, “Smart Money, Smart Kids,” written with her dad, Dave Ramsey. Chris Hogan is a popular speaker on personal finance, retirement and leadership; he helps people across the country develop successful strategies to manage their money, both in their personal lives and businesses. His new book, “Retire Inspired: It’s Not an Age. It’s a Financial Number,” was released in January 2016.

Question: Day trading! Is this too risky for people without a clue to get into? If you day trade, should you ever count on this as investment income, or is it too much of a gamble?

Answer: Day trading should never be an investment option. It is one of the most likely ways to lose money.

Simply put, day trading is a method of buying and selling single stocks for very short terms — usually less than a day. So you might buy a stock in the morning and sell it that afternoon. These are always really volatile stocks and you have no way of knowing if they’re going to skyrocket straight up or come crashing straight down on any given day. Day trading comes with a stupid degree of risk! It is gambling disguised as investing.

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Talk to your investment professional instead, and find something with a proven track record of making money, like a good growth stock mutual fund — and invest in that.

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Question: How important is disability insurance, really? And what about long-term care insurance? Is it worth the expense?

Answer: Disability is the most commonly overlooked of all the insurances that everyone should have. Statistics show you actually have a greater chance of being disabled than of dying during your working lifetime.

There are two types of disability insurance: short term and long term. I’m not a fan of short-term disability, which generally covers you for only three to six months of expenses. That can be covered by having an adequate, fully funded emergency fund. However, long-term disability is a must! It provides a longer term of coverage if you are too sick or too injured to work. If your company offers long-term disability as part of its group plan, buy it! You won’t find it cheaper on the open market.

People are living longer than they used to, but a lot of those years can require a high level of personal care. Long-term care insurance is certainly worth the money for this care, but only if you are age 60 or older.

One research study says you can expect to spend $212 per day in a nursing home, which adds up to $77,000 a year. Spending several years in one of these facilities can completely destroy a retirement fund.

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