Tuesday, June 24, 2014

How to Start Investing

Today's financial education class covered investing. Two of the women were interested in investing their money in the market. Another has considered starting her first retirement plan. Different goals but one thing in common: they all wanted to save for the long-term. Each one wanted to know how to get started. One of the women was brave enough to consider investing on her own, although she had no prior experience in the financial markets or asset funds. So we talked about first arming ourselves with the most important investment a woman really needs when planning her future: knowledge.

As I explained to the women, actual investing is really the job of those professionals who are certified and qualified to invest. I'm talking here about financial planners and brokers. Working at the best interests and needs of their clients, these specialists are educated and experienced enough to know what type of assets or funds to buy into. Our job as potential investors is to familiarize ourselves with the various options available to us. Once we become informed, we need to set goals that financial planners can help us accomplish.

If you're a beginner, the following sites will guide you through the often complicated path of investing:

1- Securities and Exchange Commission (http://www.sec.gov/investor). As Wall Street's watchdog, the SEC monitors the financial markets and keeps banks in line. It has a special section on its website that focuses on basic investing catered to the layman who wants to understand how the stock and bond market works. There are also links covering assets of all types. It is the best place to start the research process when you are interested in learning how to invest.

2) National Foundation  for Credit Counseling (http://www.nfcc.org/). This website lists all the available credit counseling groups by state. The role of these financial counselors is to aid the public in basic budgeting, debt, and saving goals. Many groups also help consumers with home purchasing. Best part, the service is free. Once you link to your state site, you can make an appointment for consultation either by phone, online, or in person. 

3) Financial managers - This was the highlight of the night. As I explained to the women, many people are afraid of using the services of a professional. Financial advisors do have a bad reputation with the mainstream public. We've heard the reasons before: they charge too much to manage our portfolios, they force us into investments we don't like, AMD they steal our money. Not so. Shopping for a financial manager to help you invest is a lot like shopping for shoes: you keep trying one on until you find the best fit. It is similar to an interview process. You find an investing company, ask for s consultation, which is free by the way, and you find a professional that respects you enough to take the time to walk you through the process and invest your money as you request - with their experienced input. As for the cost of managing your account, it is a small percentage of your returns and is not factored in the overall return the financial manager sets to reach.

By educating ourselves on the fundamentals of investing, we avoid being mislead by financial predators. Plus we learn to take smarter control of our finances.

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