Financial PlanningFour Steps To Becoming A Financially Savvy Investor

PLAN

1) Have an overall financial plan. Setting specific goals is the first step to being a savvy investor. When you make investing part of an overall financial plan, it’s easier to understand what you’re doing and why. Investing for specific goals is a great way to be more confident that the investments in your portfolio are right for you.

UNDERSTAND

2) Understand your appropriate level of risk. All investing comes with risk. Take on too much and you could be putting your whole financial future at stake. Take on too little, and your money may never grow enough to reach your overall goals. Start by determining what your own needs and goals are, and what kind of return you’ll need to meet them. That will help you understand what kind of risks you can afford to take.

LEARN

3) Learn more about your employer’s retirement plan. For many people, most of their investing comes in the form of a company retirement plan like a 401(k). But studies show that many investors have no idea what’s even in their 401(k), which investments they’ve selected, or how much risk they are taking on.* Take the time to learn what investment options are available so you can choose the right investments for you.

COMMUNICATE

4) Talk to your partner about your investments. Investing doesn’t just affect you. It affects your entire family! It’s important that everyone be on the same page so there are never any misunderstandings, misgivings, or unpleasant surprises. Take time to involve your partner in the investing process, or get involved with their process. That way, you can reduce the risk of fights and hurt feelings, which can have a serious impact on reaching your goals.

 

* Richard Eisenberg, “We’re Flying Blind Investing for Retirement,” Next Avenue, June 12, 2014.
http://www.nextavenue.org/were-flying-blind-investing-retirement/ This material was prepared by Bill Good Marketing.

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