1. Compounding Your Way to a Fortune
This is the first in a series of six articles detailing information every person who wants to take control of their financial future should know.
How do I get started investing?
Pick up a textbook on Personal Finance and/or take a class at the local community college. Get familiar with the properties of stocks, bonds, mutual funds, certificates of deposit and electronically traded funds (ETFs). Understand portfolio allocation, diversification, and investment risk.
Ask the wealthiest person you know how they invest and get their recommendation for an ethical financial advisor to help direct your future. Just as you would get a referral for a good dentist or a good professor, seek out recommendations for good investment advisors.
With your financial commitment (i.e. $5,500 a year) and your financial goal (i.e. $1 million) decided, schedule your appointment with a recommended investment advisor. Ask about payment structure for their services and their plan to reach your objectives.
Also ask your investment advisor about his or her investment experience and their background. It’s your money, and it’s your future. You might consider taking along a knowledgeable financial friend to the meetings.
The investment advisor who has 40 years of financial background, including many years as a small bank president, might be a better choice than the person who just quit his sales job as a cleaning supplies representative to handle your money.
Now for the next big question, “How do I save $5,500 a year?” This is a topic for the next article. Overwhelmed by student loans? Check out my website on how to attack your loans.
(Illustration by David Darchicourt)