How Do You Begin to Invest?

The question is often asked, "How do I get started on my road to financial stability?" Well, yesterday I had an appointment with my "financial guy" (someone I met more than 20 years ago while I was teaching at the University of Arizona). He told me he hears the question all the time-- "How do people begin to invest?" We agreed that the first step is to find out where your money is going - to really spend some time figuring out what you are doing with your money each day, week, and month. Write things down and see what you are actually spending your money on. The fact is, most people DON'T know where each dollar is going (smart millionaires are the exeception). The next step is to think about the kind of life you want to live when you are older. Do you want to be working, do you want to travel, help your kids go to college - what? When you answer these questions, it is time to push yourself into making a call - calling someone wiser is simply the smartest choice for most of us.

I will share my brief journey with you and hope you hear the importance of what I am writing about: I met Steven when I was about 24 years old; he was fresh out of college and pounded the hallways a few times each year looking for new clients. He told me I should begin putting aside a little bit each month. He explained that because I was so young, my money would grow quickly. I told him my challenge was that I didn't make enough money to invest. Actually what I didn't tell him was that I was scared and I didn't understand the process of investing. I was so YOUNG, and retirement was so far away! Why should I begin now? Well, what I was-- was ignorant and foolish! I believe when I was about 32 he finally convinced me to open a little TSA (tax sheltered annuity). I think I began with $20 dollars twice a month. I did that for a few years and didn't think much about it. I left that money there when I left the university; but I didn't keep adding to it. Ugh. As a result it grew slowly - but hey, it's more than I had before.

Now, at age 44, retirement is but 15 years away. Lucky for me, Steven is still around to help point me in the right decision. It took teaching this workshop to motivate me to change my ways. In the last few months, on my own, I have shifted money from a .25% savings account, to an MMA where it now earns over 3% (it took me 3 minutes to do this - it was so easy). Soon, I will move it from my bricks and mortar bank, to an online account that will earn over 5%. Good things are happening. I met with Steven yesterday and visited with him about my retirement savings. His secretary laughed when I walked in - she has been calling me for years to come in and chat -and here I was - finally! Can you imagine taking nearly 15 years to take the next step? This one hour appointment educated me and I jumped at the chance before me; I FINALLY open up an additional IRA that will supplement my retirement and social security income. As I write this, I can tell you . . . I feel so much smarter and more secure about my future. Funny how retirement sneaks up on you. Do you know where will you be in 15, 20, 30 years? Working and worrying, or relaxing and enjoying life?

Steven agreed that simply deciding to move ahead is the first step - do anything - begin a high earning savings account and put in $20 every payday. Then 3 months later, increase it to $30. . . and so on. Do it with payroll deduction so you don't have to think about it; it is gone before you can see or spend it. Pretty soon, you are on your way, and doing things differently with your money. It's called "Baby Steps." Taking things one step at a time is somehow the easiest way to begin savings. For others, it may be "jumping in feet first and going for it whole hog". Hey, whatever works for you. The worst thing to do is believe that someone will be there to pick you up, or that Social Security will take care of you.

Opening up an IRA (Individual Retirement Account) begins with talking to someone at your bank, or finding a financial wizard you trust (like I did). Contrary to what you may think, investing does not take much money, and opening an account only takes a few minutes. You sign up, write them a check (the amount is your choice), and a week later, you are on the road to investing. Making a tuna salad sandwich takes more time and effort than opening up an investment account! No, I am not kidding, nor am I am exaggerating.

I relate to Steven; his office is understated, he doesn't wear suits every day, and you would never guess what he did for a living. I like that he relates to his clients and he honestly enjoys guiding people into making good financial choices. When you think about selecting someone to guide you, realize that not everyone is the Wall Street type. Choose someone who will work for you - in your best interest. Ask people who they use and shop around. Smart people find smarter people to guide them in investment options. Ask about IRAs (and other mutual fund type options). They can reduce your taxable income (that's good for people who still owe taxes come April 15th), but most importantly opening and adding to your account each year means your future is more secure, and a whole lot brighter.

Bottom line is that if you are really sick, you see a doctor. If your roof is leaking, you call a roofer. When you need financial guidance, you talk to a person who has spent their working life helping others to get ahead. The key is to make that first call. Get yourself educated; in the process you will feel safer knowing you are one of the smart ones. Make your hard work and money count - do something intelligent with it!

There is a country song that begins: "Dear Mom and Dad, please send money, I'm so broke that it's not funny. I don't need much, just enough to get by. Don't worry 'cause I'm all right." Doesn't that sound sad? I prefer the last stanza of the song much better: "Dear Mom and Dad, I'm sending you money. I'm so rich, it's not funny."

Make a choice-- new sneakers, or $50 more in your new IRA? Are you listening? I don't care if you are flipping burgers, raking yards, or operating a backhoe. Investing is for everyone - that means even you.

Websites on Motivation / Goal Setting / Inspiration:

Do you need some inspiration in order to get motivated? Click below for proven techniques that will propel you ahead further and faster! BTW...I will update this section with new websites, so check back occasionally and see what is new.

http://thesecret.tv/home.html (In an emotional rut that affects your bottom line? This is a great downloadable DVD)

http://www.dellamenechella.com (goal setting and motivation - studying her site is like taking a free workshop)

Who has the right to ask for your SSN?

While any business or agency can ask for your number, few can actually demand it – the exceptions are motor vehicle departments, tax departments and welfare departments. Also, SSNs are required for transactions involving taxes, so that means banks, brokerages, employers, and the like also have a legitimate need for your SSN.

Most other businesses have no legal right to demand your number.
"There is no law prohibiting a business from asking for your Social Security number, but people don't know they can say no," says Carolyn Cheezum of the Social Security Administration.
"We recommend that you ask if they'll accept an alternative piece of identification. If they don't, flat-out refuse to do business with them. Bear in mind that there's a possibility they'll refuse to provide whatever product or service you're seeking."

“When you go to the doctor's office and fill out the medical information, they ask for the SSN. I leave it blank. Nothing happens. I'm not reporting income from them."

In fact, chances are good that many companies that routinely ask for SSNs will do business with you even if you refuse giving them your SSN. Most companies have alternative customer ID numbers but will only offer you one upon request. For instance, in order to open an account at a utility company, you may asked to fill out a questionnaire to determine payment history (all based on honesty). Questionnaires help companies determine ratings, which determines whether customers have to pay a deposit to establish service.

Linda Foley of the Identity Theft Research Center says she brought her critically ill cat to a vet's office and balked when she was asked for her SSN. "I said why? Will it be my cat's ID number?” They said “No, but if you give us a check we want a driver's license and a SSN in case the check bounces.” I said I'd pay by credit card. They said it's our policy to get the number. I said, “If I give you a credit card and refuse to give you my Social Security number you'd let my cat die right now?” They looked at me and the cat and said, “Give us the card; we'll take care of it.” I was upset about the cat, but I was frustrated by the way I was being treated. It was unnecessary."

(This is a partial reprint from Yahoo Finance – for more information, visit their website at: http://finance.yahoo.com/banking )

Crush Identity Theft!

Identity theft is up, but is your guard? Visit this website for the most up to date information available . . . it will only take a moment of your time, but will save you a hundred hours of valuable time trying to regain your financial identity!

http://banking.yahoo.com/20020612a.html

Five Statistics to know:

1. The average American carries $9000 debt.
2. The number of credit card solicitations by mail has exceeded 6 billion annually. You can opt out of getting solicitated by calling 1-888-5-OPTOUT.
3. If you were to pay only the minimum on an $8500 debt, it would take you 35 years to pay it off.
4. Some states like South Dakota and Delaware have no caps on the interest rate percentage that can be charged. Your card company probably bills you out of one of these states.
5. Medical expenses contribute to 50% of all bankruptcies.

Websites on Money!

Click on my favorite money related websites! If you know of another good website, let me know. I will update the list, so check back once in a while!

Money Management Websites:

http://www.oprah.com/money/money_landing.jhtml (Oprah's experts give you lots of general information)

http://money.cnn.com/ (everything on money)

http://www.budgetingbabe.blogspot.com/ (popular blog on one girl's financial journey - lots of tips)

http://www.bankrate.com (financial calculators, compare bank rates, much more)

http://www.daveramsey.com (one of the gurus-- famous for the Debt Snowball, and known for hating credit cards)

http://www.suzeorman.com (another guru--she focuses on organization of your record keeping, financial planning and has great, easy to use, inexpensive products designed to help you build wealth)

http://www.personalfinancebudgeting.com (free downloadable budgets, calculators, tips, online e-course)

http://www.playbook.thehartford.com (The Playbook for Life. Designed for athletes but perfect for us all. Great interactive forms on budgeting/calculating net worth/setting goals)

Identity Theft in Arizona:

RED ALERT! Arizona is #1 in Identity Theft!

Here are the latest figures on identity theft in the United States
The Top 10 states for identity theft (on per-capita basis)

Ranking / State / Victims per 100,000 people / Total Victims
# 1 /Arizona / 142.5 / 8,186

# 2 /Nevada /125.7 / 2,935
# 3 / California /122.1 / 43,839

Tips to prevent Identity Theft: Don't provide your Social Security Number unless it is absolutely required by a company; ask companies to provided you with an alternate ID number. Change any ID card that uses your SSN as a reference number. Use a cross shredder to shed all paperwork with valuable information on it, such as your SSN, computer passcodes, old credit cards, and personal information. Lock your mailbox and give your carrier a spare key, or use a P.O. Box at a local station. Do not reply to phishing scams (Internet e-mail); always contact companies by typing in a direct e-mail address. If a bank contacts you at home to verify recent activity on a card, tell them you want to verify the call before you speak with them. Then call your bank directly and ask for verification. Call your credit card bank and request they stop sending you blank checks in the mail. Never leave mail unattended, or in your car in plain sight; people may break in and steal all the information they need to steal your identity! Keep careful track of your checks and card purchases; compare against your monthly statement on a regular basis. Keep your blank checks locked away from visitors; thousands of family members and house guests steal blank checks each year from unknowing/trusting people-- don't trust people you don't know, and don't accept anyone's trusting word on a houseguest. Use your bank's online website to verify your banking account activity on a regular basis. Don't allow someone to swipe your card out of your sight; if you did that with a debit card they can wipe you clean by copying your number (credit cards are safer in this regard - most banks will limit your liability). If you use a computer to buy things, or pay bills with, make sure your Internet connection is secure; increased use of non-locked wireless connections translates to an increased risk for someone to tap in. NEVER store your numbers, passcodes or personal information on your computer - not even in a folder in your E-mail Inbox. Write them down and tuck them away safely. Mix up your passcodes, using numbers and letters, PARTS of words, underscores, whatever - never use pet or child names, or anything code crackers can search for. Code crackers have multiple computers going 24/7 that search for computers left running idle which look for common names; log off your computer when it's not in use. Change your passcodes frequently, and do not replicate them for multiple accounts (I know this one is a pain, but be safe). Check your credit report online on a regular basis; it's free once a year, and there are three different national companies to choose from. Checking online takes no more than five to ten minutes. You will be asked several questions to verify your identity so be prepared with your old addresses, work history/dates, and so forth. Make sure to always use the same exact name and spelling on all your accounts; this will make verifying your report and accounts easier, and make it tougher on a thief!

For more information on keeping yourself secure and safe, look for updated information on this blog. Also, go online occasionally and look for new tips. You don't want to be the next victim who has to spend a hundred extra hours of your time cleaning up your record.

Obliterating the Latte Factor:

What is your guilty pleasure?

By now, you should have heard the buzz about one of largest everyday drains in many people's bank accounts. I'm talking about our snacks on the go. This loss of change has been appropriately coined "The Latte Factor" - it's the money we don't think too much about. So many working people have the mentality that we are too busy to think ahead, so we grab a coffee, soda, and/or a quick snack - we plunk down our change with little thought about the cost over the long haul. Have you every TRULY sat down and calculated how much your on the go mentality costs you? I will allow the numbers to speak for themselves. Tall iced latte with a bagel = $6.00 @ 3X a week = $18.00 @ 4 weeks a month = $72 a month @ 12 months a year = $874.00. Yes, that is what I said....eight hundred and seventy four dollars A YEAR for an occasional coffee and bagel. Oh, you don't do that? How about the expenses of a Big Gulp Pepsi 3X a week? Yearly cost equates to...$143. Are you getting the idea? Think about how much you could save if you made your coffee at home, or iced down your own soda and took it with you....doesn't that sound like an easy saving solution? Not enough to get you to change? Imagine this: If you made your coffee at home 2 times a week for five years you could easily save $240. That bagel and coffee three times a week over five years = $4370. You could spend 14 days in Europe and live it up on the Rhine River! So, can you find a way to trim your budget a little more?

http://www.msnbc.msn.com/id/14377894/