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Investing as Part of Your Retirement Plan

December 17, 2014 in Investing

Planning for retirement is all about saving money – and you can save money in different ways. You can hide your money in a secret hole under your floorboards, but then you’re actually losing money because of inflation. You can put it in a savings account, but most savings accounts bear so little interest that they just about break even with the average three percent inflation rate. The other option is to invest. Whether you’re investing in stocks, bonds or any other vehicle, you’re actively adding to your wealth – and the financial health of your retirement.


Retirement planning doesn’t have to be expensive or stressful.

Special Retirement Funds

If you have an employer-based 401(k), an IRA or a Roth IRA, you’re already investing. So many Americans use these vehicles because the government provides lucrative incentives to do so. You are – depending on your age and other factors – allowed to put money away into these funds free of any tax burden. The catch is – with a few exceptions such as medical emergencies – that you can’t withdrawal your money until a certain age. The good news is, if you’re an older investor, you can add even more tax-free money in every year than younger investors.

Stock Investing

Instead of tax-sheltered retirement accounts – or in addition to them – many Americans choose the stock market as the place to try to grow their money for retirement. Many retirement funds include stocks, but you can also venture out on your own. The stock market – like all investing – comes with the potential for risk and the potential for reward.

Don’t Lose Money

Although this is easier said than done, the best strategy for stock investing is – if nothing else – to not lose money. Even if your investments succeed, you can lose money over time through the slow bleed of fees. Only licensed brokers can legally execute trades, so every time you buy a stock, the broker gets a commission – for every different purchase.

Funds

One way to avoid constant broker fees is – instead of buying lots of stocks and paying lots of commissions – to buy into a fund that contains a wide range of securities. The most common method to do this is through mutual funds. Mutual funds, however, are actively managed by “experts” who you never get to meet or talk to and who receive really big salaries, which are paid by the fund’s investors. Every time he or she makes a trade within the fund, a commission is paid to a broker – that also comes, in part, from you.

Index Funds

Index funds are great for those interested in investing in stocks for retirement because they are passively managed and therefore have much lower fees. They merely mirror a specific index, like the S&P 500 or the Dow Jones Industrial Average. As discussed in the “One Senior’s Perspective on Navigating this Stock Market,” financial crashes like the Great Recession of 2008 can crush retirement accounts. But over time – even including the Great Depression – the market averages about 11 percent. If an index fund merely mirrors that, you’re beating virtually all mutual funds – without the high fees.


A well-chosen index fund can be all you need for retirement planning.

Stock investing is tricky, but so is retiring without enough money. Look over your current retirement fund and consider adjusting it by switching your holdings over to an index fund. It certainly beats that hole in your floorboards.

Andrew Lisa is a freelance financial writer. He covers the stock market and retirement planning.

Investing Strategies for Beginners

December 10, 2014 in Investing

For those considering starting out in stock investing, it’s important to have a grasp on the stock market basics. From there, you can begin to formulate a strategy based on your tolerance for risk, your budget, your age and your goals.


Diversity is the key to long-term investing success.

Different Kinds of Funds

A common thread seen in most credible investment strategies is diversification. Spreading your money out so it’s not shackled to one single investment, one vehicle or even one sector is a key to long-term growth. A great way to achieve this – as opposed to buying lots of securities individually – is to buy into a fund.

Mutual Funds

Mutual funds are collections of all kinds of investment vehicles (stocks, bonds, real estate, etc.) that are chosen and run by a mutual fund manager. There are all different kinds of funds of all different sizes. You stick your money in, and an expert handles all of the decision-making. The drawbacks, however, are that you never get to meet or talk to that “expert,” who is paid handsomely for his or her services. Also, every time an adjustment is made (e.g., a security is bought or sold), a commission goes to the broker who executes the trade – all of this is included in the fund’s fee.

Index Funds

When you’re just learning the stock market basics, it may be wise to look into index funds. Index funds are a great stock investing strategy because like mutual funds, they include a wide range of holdings and therefore provide diversification. Unlike mutual funds, however, index funds are not actively managed, and therefore come with incredibly low fees (there is never a need to pay a fee of more than 0.4 percent on an index fund).

They do not aim to beat the market (which the vast majority of mutual funds do not achieve), but only to mirror it. If you buy a fund that mirrors the Dow Jones, for example, you buy a tiny chunk of that index in the exact same proportions. When the Dow rises (which it inevitably does, over time), so does your investment.

ETFs

Exchange-traded funds, or ETFs, are funds that trade like stocks on the exchange, hence the name. Mutual funds often require a substantial minimum buy-in price and require you to leave your money untouched for a specified time period. ETFs, on the other hand, allow you to buy into funds the same way you would a stock – they are sold in shares on the market during business hours.


Mutual funds are run by skilled managers – but expertise comes at a cost!

For beginning investors, trying to beat or time the market is an almost certain ticket to the poor house. Invest with your eye on the long game, and you still are unlikely to beat the market – but with a well-chosen fund, you might be able to mirror it, and that would put you way up on top.

Andrew Lisa is a freelance business writer. He covers the stock market, personal finance, and profiles top content firms, such as MediaShower.com.

Hiring a Broker? Don’t Be Afraid to Conduct Online Interviews and Meetings

December 7, 2014 in Advice, Investing

Investing in stocks requires a broker to legally make the trade on your behalf. Low-cost firms provide only that service, but for more serious stock investing, a broker becomes a familiar, trusted figure in the investor’s life – like a doctor or a barber. Just as with both of those occupations, when you find a good broker, you don’t want to let them go.

Brokers do more than make trades. They offer advice, help develop your strategy and adapt that strategy as time moves on. The broker/investor relationship is about trust, and that trust should start with a meeting. In the modern age, the initial meeting can take place online. Follow this guide to conducting an online interview with your broker.


You can have a professional meeting with your broker without leaving the comfort of your own home.

Formality and Appearances

As discussed in “Why Online Meetings Are the New Normal,” online meetings carry the same weight and should be treated with the same seriousness as an in-person meeting. Be on time and practice formality in speech, dress and environment. Just because you’re lounging around your house doesn’t mean you should dress like it. If you would shower and put on a shirt and tie for an in-person meeting, do the same here.

Don’t chew gum, pay attention to grooming and be mindful of your background. The area behind you should be blank (a wall) or neat and professional (an orderly bookcase).

Be Prepared

Part of the online call is getting to know your potential broker and letting him or her get to know you. This is the person who will be investing in stocks on your behalf – you must have a list of questions regarding his or her background and philosophy, and finally, about what you want, expect or believe. Prepare more questions than you plan to ask, and mention any philosophical or ethical issues you have regarding stock investing.

Content

Although you shouldn’t fly by the seat of your pants, don’t be too rigid, either. Prepare an outline, but let the conversation develop naturally around it. It is here that you’ll find out what commission your broker makes, what percentage they’ll charge you, how much their consulting services cost, what their minimums are and how account withdrawal works.

No matter how friendly you and your broker become, stock investing is business. He or she is in it to make money, as are you. You can bet that the broker has his or her bases covered regarding fees and income – you should, too.


A good broker is a trusted, long-term figure in an investor’s life.

Choosing a broker is a monumental – perhaps lifelong – endeavor. It requires a meeting, but that meeting doesn’t have to take place face to face. It does, however, have to be treated with the same level of seriousness and formality that a traditional meeting would carry. We’ve advanced so far that the technological part is now the easy part. There are a million free online meeting services with reliable VoIP video and audio – the hard part is, as it’s always been, nailing the interview.

Andrew Lisa is a freelance business writer. He covers stocks, investing and small business.

Mobile Hot Spots and Other Tech Gadgets Every Investor Should Own

October 26, 2014 in Advice, Investing

When it comes to stock investing, a sharp mind is the most reliable gadget a person can own. But even the sharpest, most detail-oriented among us can stand to gain a little from the miracle of modern technology. Do you go to sleep at night and wake up in the morning thinking about investing in stocks? Get a leg up with help from some of these amazing gadgets.


A mobile hotspot turns wherever you are into an Internet cafe.

Mobile Hotspots

Timing is everything when it comes to stock investing. If you’re playing the market in the digital age, you’ve got to be mobile. A mobile hotspot enables you to work from wherever you are, without having to rely on WiFi being provided by the restaurant, hotel or coffee shop you’re in when an opportunity presents itself. Simply switch it on and watch your laptop or tablet come to life.

Convertible Computers

Convertible computers are the next revolution in mobile stock investing. Part tablet, part laptop, hybrids were novelty toys for people who could afford more than one computer just a few years ago. But now, new high-end models like the Microsoft Surface Pro 3 have enough power to function as the only computer for the modern investor. The detachable tablet offers touch-screen – and even stylus pen – capability, but with the full familiarity of keyboard typing.

Paper Scanners

Virtually all stock investing is done online – but that doesn’t mean that investors don’t stack up a ton of paper clutter. From a lengthy prospectus that you received in the mail to investment-related receipts you’re saving for tax time, investing in stocks is still a business that is done on paper. Paper scanners, like the Neat Connect line of cloud-based paper scanners, free your life from paper clutter. Scan any item and it becomes a searchable document. Since it goes right to the cloud, it doesn’t even take up space on your hard drive.

Wireless Printers

You’re going to need a fast, reliable printer, but you can’t be shackled to a specific workspace. You’re going to want to visualize and write on physical copies of charts, graphs, prospectuses and other documents. With a wireless, WiFi printer, you’ll be able to print instantly and remotely from your laptop, your tablet – even from your phone. Wireless, all-in-one printers are cheaper than they’ve ever been, and when you’re not using them for stock investing, there are a million ways to use them for personal printing.


Hybrid computers blend laptop power with tablet mobility.

A meticulous mind, relentless attention to detail and persistence in the face of frustration are the best tools an investor can possess. With those in place, however, exciting new technology can boost your productivity and – hopefully – profitability. Your competition is stocking up on any gadget that will give them an edge. You should, too.

Andrew Lisa is a freelance technology writer. He covers business technology and reviews new tablets and computers.

How to Protect Yourself from Investment Fraud

October 20, 2014 in Advice, Investing

If you’re investing in stocks as part of your retirement plan, you have a great, big target on your back – especially if you’re an older investor. There is an entire industry – and a big one at that – designed to con investors by playing on their hopes, fears and, yes, their greed. You’re trying to take money out of the stock market – but con artists are trying to take money out of your account. Take steps to protect yourself.


Don’t be a target – protect yourself from swindlers.

If it Sounds Too Good…Don’t Let Your Hopes Cloud Your Judgment

The article “Retirement Investing: 7 Ways to Protect Your Retirement from Investment Frauds” reiterates a truth that most of us learned at a very young age: If it sounds too good to be true, it probably is. Even the safest investments come with risk. No investment – especially one that involves the stock market – is “foolproof,” “guaranteed” or “100 percent.” If someone pitches an investment that doesn’t come with risk, run.

If They Say “Buy Now!”, You Say Goodbye

Investing in stocks is a lot like any other transaction where money changes hands – watch out for the hard sell. Swindlers don’t want you to contemplate their offer, ask around or do research. They want to get whatever they can from you as soon as they can get it. The stock market has a lot to do with timing, and they will play on this. You should never have to decide right now, today, by 5pm. When someone pitching a stock investment is trying to create the illusion that you’re running out of time with every second you think about it, it’s probably because they don’t want you to think about it.

The Enemy Within

Sad but true: More than one-third of elder financial abuse comes from family members, friends or neighbors – often those who were most trusted by the victim. Be wary of anyone asking to have their name added to your accounts, or of anyone who requests personal information – and that means anyone. No one ever needs your Social Security number, your passwords or any of the information that are common security check answers (your mother’s maiden name, your first dog’s name, etc.).


Keep an eye on your piggy bank – you’re not the only one who wants what’s inside.

Investing in stocks is a great way to save for your future. But it also advertises to the world that you have money to spend – or, in the case of the many unscrupulous people among us, money to be taken. Be smart, use common sense and control your emotions – specifically hope and greed. Watch out for people close to you, and never trust a deal that the seller doesn’t want you to sleep on.

Andrew Lisa is a freelance personal finance writer. He covers personal investments and retirement planning.

Ergonomic Furniture to Help You Withstand Those Long Investing Sessions

October 12, 2014 in Advice, Investing

With stock investing, timing is everything – and most days, getting it right can take a very long time. Hours spent stationary, poring over charts, stats and movements is great for your strategy but horrible for your body. If your body is going to keep up with your mind, office ergonomics are a must.


A comfortable work environment can make stock investing much more exciting.

Sitting on a Good Investment

With the exception of huge dividends, a good chair is the best friend of someone who makes money from stock investing. The place where you park for countless hours is not the time to play it cheap – but you don’t have to spend a fortune, either. There are a range of ergonomic chairs for under $100 at most big retailers’ websites. Try to spend just enough to get free shipping, which is usually around $50.

Height-Adjustable Furniture

A sedentary lifestyle can contribute to all kinds of health risks, including obesity and heart disease. Successful stock investing entails a lot of sitting in front of a computer. But with the simple addition of adjustable furniture, you change change positions without interrupting your work. Just moving from sitting to standing alone can dramatically reduce the problems associated with static positioning.

Lighting Is Everything

The right light can mean the difference between a comfortable work day and one fraught with headaches, fatigue, irritability and trouble focusing. Don’t rely on overhead fixtures. Add bright, focused, personal lighting to your workspace to remain alert and focused without straining your eyes.

Monitor Height

Ideally, the top of your computer monitor should be at or near eye level. Any more or less and you not only strain your eyes, but you risk slumping posture, which negates the whole point of having a good chair and desk. Monitor arms allow you to adult the height of your screen so it’s always at the perfect height, leading to greater comfort and greater efficiency.


Stock investing requires a lot of sitting behind a computer screen – get comfy!

Even if you’re seeking short-term gains, investing is a long process and a day-to-day grind. Uncomfortable office furniture and accessories can lead to back pain, leg pain, strained eyes and serious problems in the wrists and hands. You’re investing in the stock market to invest in your future. Take the time to invest in your body. Comfort is not a luxury, it’s a necessity.

Andrew Lisa is a freelance writer who covers home business and office management.

How Much Money Could You Make as a Financial Advisor?

October 6, 2014 in Advice, Investing

Stock investing is awesome! You have a knack for it, you like it, you’re good at it and you know stock market basics – and then some. But could you ever make money as a financial advisor, and if so, how much? Like any profession, there is spectrum of income potential depending on how much you work, with whom you work and the kind of work you do.


Financial advisors can work with anyone from the very rich to average people.

About Financial Advisors

According to Investopedia, a financial advisor is defined as someone who “provides financial advice or guidance to customers for compensation. Financial advisors can provide many different services, such as investment management, income tax preparation and estate planning.” In order to become a financial advisor, you must pass the Uniform Investment Adviser Law Examination and carry a Series 65 license.

Can Advising People About Money Earn Me Money?

According to “High-earning Jobs to Help Pay Off Student Loans Faster,” the best financial advisors can rake in big bucks. The top 10 percent command salaries of more than $187,000 a year. The median income is more than $67,000, and you’re not likely to bottom out at less than $32,000.

What Are They Looking for in You?

So how do you get into that lucrative top 10 percent of big earners? One of the best ways to find out how to be a top financial advisor is to look at the advice the pros give to regular people seeking their services. Investment giant Kiplinger tells people seeking a financial advisor to pick someone with a definitive investment philosophy. If someone asked tomorrow about your philosophy, what would your answer be?

Most importantly, they give the very good advice of telling people to be thorough and do a deep background check. Before submitting to a background check, you should first give one to yourself. Know every detail of what’s in your professional and personal background. Even if you’re not attempting to hide an old skeleton, it will likely come raging back out of the closet upon inspection. Be ready to give an explanation.


The best financial advisors are well compensated for the valuable service they provide.

Great financial advisors are in short supply. They can work with everyone from the very rich to the average person working toward a comfortable retirement through stock investing. Success has to do with more than knowing the stock market basics. It is a business based on trust, honesty and rapport. People will trust you with their most intimate financial knowledge, and you must hold that trust sacred. Yes, you can make money, but that money must be made on the foundation of the financial success of the clients you help.

Andrew Lisa is a freelance financial writer. He covers stock investing and personal finance.

Should You Trust a Broker Who Earned an Online Degree?

October 2, 2014 in Advice, Investing

If you’re investing in stocks, you rely on the skill and integrity of your stockbroker as much as you rely on the same traits from your auto mechanic when your car breaks down. The world of stock investing is competitive and fast paced – and a lot is on the line. You need to know that your broker is the best trained, best educated and most experienced that you can afford.

But what if he or she got their degree through a distance-learning program? Can you trust a broker who earned their degree online?

The short answer is: yes.


Your broker can make you a lot of money, whether or not they earned their diploma online.

A Little Bit About Online Students

As discussed in “5 Things You Didn’t Know About Online Students,” distance learners aren’t exactly your typical college kid. In fact, they tend to be older, married, working adults with children. The vast majority (as many as 70 percent, although that number may be slipping a bit) are women. Sixty-six percent are over the age of 30, and fewer than five percent are of “normal” college age.

Distance Learning: The New Normal

According to statistics, nearly 20 percent of secondary-education students receive at least 80 percent of their education online. Once a marginalized niche that was frowned upon by academics, distance learning is now mainstream. The completion rates for online students are as high or higher than their traditional campus counterparts, and more and more tenured teachers cross over to teach online courses.

Investor Exams

For stockbrokers, the Series 7 is more important than any final exam was in college. Notoriously difficult and thorough, the Series 7 – like the Bar for lawyers – is the gatekeeper for those interested in making a living out of stock investing. The reason you can’t trade stock yourself is because, by law, you must be licensed to do so. Anyone who is licensed to be a stockbroker passed the Series 7. If they got over that hurdle, does it really matter how they earned their diploma?

Know Your Broker

No matter how they earned their diploma, your broker had to do homework – and so should you when it comes to you broker’s background. According to Forbes, only 15 percent of Americans checked out their broker before investing in stocks. Look up their licenses to make sure they’re registered, and check out their backgrounds and histories with state and federal regulators. Worrying about their college background should come second, if at all.


Online learning is now a regular, mainstream part of higher education.

The reality is, education is important. But in the high-speed, cutthroat world of stock investing, a broker’s real-world experience, connections, ambition, intelligence and tenacity can be more important than a degree. But if you put a high premium on college education, don’t discount distance learning. Keep in mind that Yale, Harvard, Cornell, Penn, Dartmouth and Columbia all offer online education. The degree is just as valid, the education just as sound and the money that you make from investing in stocks will be just as real.

Andrew Lisa is a freelance business writer. He covers stock investing and personal finance.

How to Keep Your Sensitive Info Safe While Investing

September 7, 2014 in Advice, Investing

In the digital age, investing in stocks almost always involves sending sensitive data over the Internet and, therefore, exposing it to the danger of accidental leaks or intentional breaches. When buying and selling on the stock market, you are – by the nature of investing itself – revealing the kind of data that is the most desirable to hackers, digital scammers and identity thieves, specifically financial and personal information. Keeping your data safe is always important. When it comes to the kind of data necessary for investing in stocks, however, an extra level of attention is required.


Protect yourself with security software and password protection.

Data Security: Nothing New in America

An article titled “Privacy has Been a Concern in the United States Since the Very Beginning” points out that concern over data security is nothing new. The Founding Fathers were so focused on security regarding personal data, in fact, that they guaranteed its protection by including the right to privacy into the Bill of Rights in the Fourth Amendment to the Constitution – although they referred to “data” as “papers and effects.”

Protect Yourself

First and foremost, use security software that not only protects against malware and spyware, but also installs a firewall on your computer. You don’t need to know much about computers to provide this layer of protection. Always secure your WiFi with a password that locks out unauthorized users. Don’t click random links, never provide information from requests via email and don’t respond to suspicious emails, even if they appear to come from your financial firm, bank or third-party money gateway such as PayPal.

You Can Only Do So Much

The reality of data security is that once you make sure things are secure on your end, you can only do so much regarding the security of your investment firm (which is far more likely to be targeted by hackers). A recent article points out that even major, stable, established retailers, sellers and financial firms – such as Fidelity National Services, eBay and Target – can be attacked and breached, putting the data of millions of customers at risk.

While this is unsettling, the reality is that large firms like this almost always take immediate steps to fix the problem and compensate victims. When investing in the stock market, use a brokerage firm (by law, all stocks must be bought and sold through a licensed stock broker) that is large, reputable and that has the resources to defend against breaches and deal with any issues that do arise.


The biggest investment firms work hard to keep your data safe.

Although media portrayals make it seem as if data theft from large firms is a constant threat, these institutions invest millions to hire the most qualified experts and invest in the best hardware and software available in the defense of your data. Use common sense and basic protections on your end, and invest with firms that are large enough to absorb the impact of a significant breach.

Andrew Lisa is a freelance business writer. He covers personal finance and stock investing.

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