 |
Review financial management
strategies periodically and revise when necessary |
|
|
Determine/establish an
adequate amount of emergency fund for your individual situation |
|
|
Evaluate current insurance
policies and shop around for additional or replacement coverage, if indicated |
|
|
Check your income tax
withholding level and adjust, if indicated |
|
|
Maximize tax deductions (e.g.,
using home equity credit lines versus non-deductible consumer interest) |
|
|
Set written short-, medium-,
and long-term financial goals following the $MART goal format |
|
|
Obtain a copy of your credit
report to see if it is accurate and complete |
|
|
Establish and periodically
evaluate wills and estate plans |
|
|
Develop a plan to insure that
you save the money needed to fund your goals |
|
|
Set up a regular savings
program, if you do not already have one |
|
|
Identify two strategies you
could implement to help you accumulate funds to invest |
|
|
Identify a money-consuming
habit that you would be willing to change |
|
|
Calculate the amount of money
you can realize in one year by changing this habit |
|
|
Change your behavior, save the
appropriate amount of money, and invest it |
|
|
Track your investment and
watch it grow |
|
|
Read about equity and
fixed-income investments in "the financial press" |
|
|
Investigate equity and
fixed-income investments available through your employer plan, if available |
|
|
Obtain additional investment
information from Cooperative Extension or financial services firms |
|
|
Identify equity and
fixed-income investments that match your goals and available cash flow |
|
|
Research these investments and
compare at least three specific products (e.g., stocks) |
|
|
Calculate the percentage of
your portfolio allocated to equity and fixed-income investments |
|
|
Determine your marginal tax
bracket (see Unit 7) to see if tax-exempt investments such as municipal bonds are
cost-effective |
|
|
Investigate mutual fund
investment choices (e.g., stock funds) available through your employer plan |
|
|
Decide upon your selection
criteria (e.g., minimum deposit, low expense ratio) |
|
|
Identify specific mutual funds
that match your investment goals |
|
|
Call at least three mutual
fund firms for a prospectus |
|
|
Do further reading on those
mutual funds and mutual funds in general (e.g., prospectus, books) |
|
|
Do follow-up research using
Morningstar or Value Line |
|
|
Complete a mutual fund
application and make an investment |
|
|
Track the progress of your
funds at least quarterly |
|
|
Inquire if your employer has a
tax-deferred retirement plan (e.g., 401(k)) |
|
|
Find out what investment
choices are available within the employer plan |
|
|
Find out if your employer
matches your investment dollars and, if so, by how much |
|
|
Set a date to start
contributing or to increase contribution- either a dollar amount or a percentage of your
salary |
|
|
If you are self-employed,
determine the type of retirement plan you could start, set an amount to save, and begin
making contributions |
|
|
Investigate IRAs and determine
which is best for your age and income level |
|
|
Increase contributions to your
tax-deferred plan each time your pay increases |
|
|
Investigate inexpensive
investment options available through your employer, if available (e.g., 401(k) and savings
bond purchase plans) |
|
|
Attend an employer-sponsored
investment seminar |
|
|
Identify at least three
"shoestring" investments that match your goals and available cash flow |
|
|
Research these investments and
compare at least three specific products (e.g., three large company growth funds). Use the
Shoestring Investment Comparison Worksheet to record the key features of each |
|
|
Dollar-cost average mutual
fund purchases and/or enroll in an automatic investment program |
|
|
Investigate the initial
minimum deposits required for specific investments and ways that they can be reduced
(e.g., automatic investment plan) |
|
|
Start reading the business and
financial pages in the newspaper on a regular basis |
|
|
Subscribe to a personal
finance magazine |
|
|
Find out if an investment club
meets in your area and ask to visit one of their meetings |
|
|
Read business and finance news
on the Internet at Web sites
www.usatoday.com/money, www.wsj.com, and www.quicken.com/investments |
|
|
Read a business or finance
magazine on the Internet (e.g., www.smartmoney.com) |
|
|
Investigate mutual fund
information online at Web sites
www.morningstar.com,
www.mfea.com, and www.lipperweb.com |
|
|
Set up a "portfolio"
online of stocks you own or are watching |
|
|
Research a company or industry
online (e.g., search the SEC’s EDGAR database) |
|
|
Develop a financial plan to
guide your investment choices |
|
|
Read at least one financial
planning resource and decide if you can prepare and execute a plan yourself |
|
|
Match your financial goals
with the professional adviser best suited to help you achieve them (e.g., lawyer,
financial planner) |
|
|
Use the six-step plan described under
Choosing Your Team of Financial Professionals in this unit to select the right
professional for you |
|
|
Become familiar with resources
on investing and consult them often |
|
|
Stay involved in the
process—stay educated enough about investing to ask hard questions and closely
monitor a professional’s work. Balance your trust in a professional with a
healthy amount of consumer skepticism |
|
|
Get a copy of a form for
taking notes, so you remember what questions to ask when someone calls to sell you an
investment from the SEC Web site
www.sec.gov/complaint/callform.htm. |
|
|
Keep notes of your
conversation when you talk to a financial professional who makes recommendations |
|
|
To learn more about
telemarketing fraud, get a copy of Swindlers Are Calling
from the National Futures Association <www.nfa.futures.org/investor/SAC.shtml>.
Also read Cold Calling
Alert from the SEC:
www.sec.gov/investor/pubs.shtml>. |
|
|
Download and print out
information about investment opportunities you read about online if you think you want to
consider investing. If you later decide to invest, you’ll have proof of the offer |
|
|
Maintain a filing system to
keep all confirmation slips, statements, and notes about each investment |
|
|
Ask to be put on the "do
not call" list if a salesperson’s calls are annoying you |
|
|
Report any suspicious sales
activity to your state securities regulator and to the SEC |
|
|
Read about
How the SEC
Handles Your Complaint or Inquiry at the following Web site:
www.sec.gov/investor/pubs/howoiea.htm>. |
|
|
Get the name of your state
securities regulator from <www.nasaa.org/nasaa/abtnasaa/find_regulator.asp>
and put the phone number in a handy place |
|
|
Call your state securities
regulator and check the central registration depository (CRD) file for your broker to see
if there are any disciplinary problems on file |
Action Steps