It's Time to SAVE---Never to LATE By:S.Dickerson

In my last posting, the discussion centered on finding ways to save, followed by ideas for some very stable (little to no chance of financial loss) investment options for beginners. Make no mistake, it takes time to build a nest egg, especially if there are pressing financial obligations that must be resolved prior to stepping into the saving zone. When you find you are finally in a position to invest, you’ll need to do some homework if you want to avoid being an ignorant investor. Check out my experience…




Recently I had a visit with an investment banker. I found him through the recommendation of a very trusted friend, so I felt good about scheduling a visit with him, especially since it cost me nothing. I figured the least I could do was listen to professional advice and recommendations, while at the same time gaining an idea of how he thought I was doing thus far.



My visit started with a professional’s assessment of my current financial well-being. This was accomplished through answering a few key questions:



• Are you currently employed and investing in a retirement account through your company such as a 401K?

• Do you have an IRA (Individual Retirement Account), and if so is it a ROTH or a Traditional account?

• Do you have a six month emergency fund that will cover ALL your expenses in the event of the loss of your current source of income?

• Do you currently have any investments?

• How much would you feel comfortable investing without dipping into your emergency fund?

• What are your investment goals?



There may have been a few other questions, but these were the main ones, establishing whether I was actually in a position to take the next step towards investing. Once these were answered, we were able to direct ourselves towards the best options for me at this particular time in my life. We discussed the pros and cons of investing in mutual funds, with one in particular being recommended. I like the idea of investing in mutual funds, and have been considering taking the leap for several years, sending for and pouring over many prospectus which laid out their performances over 1, 5, 10, and 20 year periods.



The way to make money by investing in mutual funds is to hold on to them through frightening stock market fluctuations, and of course, choosing one that has proven itself to be solid, reliable, well-established. The other area you’ll want to look at is what fees and costs are associated with managing your fund…there are often fees included, some of which are not as clearly visible as others. The investment banker I spoke with wanted an initial investment of $5,000 minimum for 5 years.



Before talking to an investment banker or broker, there are some things I recommend you do. First, have a thorough understanding of your current financial situation. If you don’t have cash readily available to invest, consider purchasing short term money market CD’s as a way of building your savings. Next, go online and do a search of mutual fund companies. Most of them will send you a free prospectus for your review in the privacy of your home without feeling any pressure or inadequacies you might experience when talking to the professional bankers. Pay close attention to minimum initial investment requirements, associated fees, and costs of managing your fund. Make notes of things you may not fully understand so that when you do speak with an investment manager, you have a better chance of coming to a well-informed investment decision.



My final thoughts on this article concerning investments: I usually begin my articles by talking about the one person who has most inspired me and the decisions I’ve made in my life---my mother. There was one main lesson my mom taught me a very long time ago about money, and that was to give the first 10% to God. Though I may not have always understood why this was important, once my faith and understanding of where all my help comes from was clear, I was even more committed to be obedient to this lesson. In time I realized without the help of God, without the love of Jesus, without His divine intervention on my behalf, I could do nothing, have nothing, be nothing, so once again, thanks mom…you haven’t led me astray yet.