10 Tips to Protect Your Money

Posted by: Andrew Moran

In today’s extremely volatile and unpredictable economy, many people are wondering how/if they will be able to manage their money wisely enough to retire. For many of these people, retirement funds, either savings or pensions, are the only sources of cash they have. In order to manage and protect these “nest eggs”, there are a few tips that can be extremely helpful.

1. Incentives Matter
2. Understand Your Investment Strategy
3. Never Completely Trust Anyone With Your Money
4. If It Looks Too Good To Be True, It Probably Is
5. Put Yourself In Someone Else’s Shoes
6. To Find Our Biggest Enemy, Look In the Mirror
7. Never Feel Too Good About Your Investment Strategy
8. Ignore The Experts
9. We Are Not All Above Average
10. Use Some Uncommon Common Sense

Many of these rules are fairly straight forward, but there are a few which deserve a little bit of explaining. In essence, these ten tips are some basic rules to abide by when dealing with investment. When it comes down to the bare bones of these ten tips, the main idea to take away is when you are about make a decision regarding and investment, you should step back and take some time to seek the opinion of some trusted family members, friends, co-workers, etc. These are the people who may be the key in deciding to invest or pass on a certain opportunity. These are also the people who may help you come up with some colorful ideas. Financial planners, analysts, etc. are great at what they do, but many of them have their own incentives and perks for doing business with your. They may not be entirely truthful all the time, and may in fact be investing your money in ways you do not know about, or do not want. In this regard, it is important that you understand exactly how you want you money invested, and where you want it invested. A sure fire way to lose all of your money is to try and get fancy with your investments and your investment strategy. According to the experts, it may be better to stick with the schoolyard principle KISS (Keep It Simple Stupid). This way, you will not confuse yourself, and will be well aware of what is going on with your money. A simple and effective strategy for maximizing your savings would include: maxing out a 401(k), opening nondeductible IRA’s, and opening a joint brokerage account. An investment strategy like this is simple and cost effective, exactly what a consumer needs.

If consumers are able to follow these rules when dealing with their investments, savings, etc. there is a much better chance for success. However, if you blindly trust a financial advisor with your money, or if you do not manage it properly, you could find yourself filing for bankruptcy or getting a visit IRS in the future.

Sources:

http://money.cnn.com/2009/01/13/pf/Ask_the_mole.moneymag/index.htm?postversion=2009012806

http://money.cnn.com/2009/01/29/retirement/tax_advantaged_retirement.moneymag/index.htm?postversion=2009012909

http://money.cnn.com/2009/02/04/pf/saving/toptips_costcutting_willis/index.htm