| Dear Subscriber, Okay, another fresh year is upon us and millions of folks are now embarking on diets, smoking cessation plans, and new exercise routines. Those are all noble pursuits, to be sure. However, today I want to propose four financially-themed New Year's resolutions that can have similarly life-changing consequences — and that are arguably much easier to achieve than those other goals ... Resolution #1:
"I am NOT going to accept paltry yields for another year!" While the calendar has switched years yet again, you'd never know it by looking at the interest rates posted in your favorite newspaper or at your local bank. In fact, CDs, savings accounts and money market funds have been handing investors practically nothing for much of the new millennium. Take a look at the following chart of yields on 10-year Treasuries. It spans 20 years, and as you can see rates have fallen steadily throughout the last decade ... 
Sure, there are reasons to believe this has to change sometime ... and I'm among the analysts who think rates could rise sharply from here despite Washington's best efforts to keep them low. But why wait at all? Why risk earning practically nothing for yet another year or two? After all, there are plenty of dividend-paying stocks that are currently handing out safe, steady yields of 5 percent, 6 percent, even 7 percent and higher right now. There's nothing stopping you from putting at least some of your nest egg to work in them immediately. Take one of my long-time favorites — Altria. Even after a strong run last year, the tobacco maker's stock is still good for an annual yield of 6 percent ... and the company's dividend history is absolutely stellar. No, I don't think it's a screaming buy right now but it proves my point. And there are many income opportunities with far better potential upside available right now. So make 2011 the year you take a closer look at them! Resolution #2:
"I'm not going to take big risks with my money!" Some folks have probably been avoiding dividend stocks because they consider them "risky." Given the stock market's gyrations over the last few years, I understand why they might think that. And I'll be the first to say that stock prices can — and do — decline sometimes. However, I would also point out a few more things: First, history has shown time and again that even during the worst downdrafts dividend stocks hold up far better than stocks that don't make regular payments. Second, over longer time horizons, the broad U.S. stock indexes have produced substantial gains for patient investors. Third, given recent action in the markets I would argue that the so-called "safest" investments are currently some of the most dangerous out there — especially longer-term U.S. Treasury bonds. (Take another look at that chart above and you'll see why!) Fourth, loads of investors are currently chasing returns in other areas that are far MORE volatile than even stocks! Me? I think you still need ample diversification. Cash on hand for emergencies. A good mix of conservative and speculative investments ... hedges ... and stakes in both domestic and foreign markets. Plus, you should always consider using other risk-reducing measures such as stop losses. So if you're currently loaded up with just one particular type of investment ... if you're simply accepting the traditional definitions of "safe" ... or if you have big profits in some of your more aggressive holdings ... consider taking steps to lessen your risk this year. Resolution #3:
"I am going to budget wisely!" My wife and I recently sat down and took a look at our family finances — both what we spent last year and what we plan on spending this coming year. Is it a fun exercise? Certainly not for my wife. Heck, only a number-crunching nerd like me would like such a task! Still, it helps us prioritize our lives and ensures that we're on the same page for the coming year. And whether you have a large family or you're on your own, I encourage you to start keeping a budget of your own starting this year. It might seem restrictive, but having defined parameters for your spending is actually quite liberating. No more feeling guilty when you buy something. No more "credit card hangovers." Plus, with a little planning and discipline, you'll surely find new ways to save more money over the long-term. You don't have to get too elaborate if you don't want to. Simply start by figuring out what you've been spending on major categories like food, energy, vacations, and clothes ... Project how much you think you'll earn in the coming year ... Then, going forward, keep track of your expenditures — no matter how big or small. Many credit card companies will allow you to download those charges right into an Excel spreadsheet. There are free budgeting programs available online now. Heck, you can even use a pen and paper! It doesn't matter how you keep track. A year from now you'll have a great sense of where you're throwing away money and what big-picture categories you might want to spend more on. And on a related note, here's ... Resolution #4:
"I'm not going to pay more taxes than I have to!" A great side effect of having a solid budget in place is that other parts of your financial life also become clearer. Not only does it get easier to save and invest, it also gets easier to plan for your tax bills. And when it comes to Uncle Sam, my philosophy is simple: Pay the bare minimum. No, I'm not saying you should cheat the government out of money that you legitimately owe. Rather, I'm advocating the use of every single credit and deduction available to you. I'm suggesting that you plan ahead and shift income to your advantage wherever possible. And I'm arguing that you make your investment portfolio as streamlined and tax-efficient as it can be. As I pointed out last April, even regular folks like us have access to at least three great tax shelters! Given our convoluted system, it simply takes a little bit of research and planning to save some money on your future tax bills. In fact, a little research and planning is all it takes to accomplish everything I outlined today. So with a little resolve there's no reason you can't make 2011 your safest, most profitable year yet! Best wishes and Happy New Year, Nilus P.S. I'm already helping my own father boost his retirement income in the New Year. And I'd love for you to join us as we continue building out a killer portfolio. Just click here now for all the details.
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