Personal finance 101: Start simple with savings, investments ...

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You may be overwhelmed by all the saving and investment vehicles available. Many believe there is more to learn about saving and investing than our busy lives can allow, says the Employee Benefit Research Institute (tulsaworld.com/Choose2Save (http://tulsaworld NULL.com/Choose2Save) ).

Some stick to familiar vehicles such as bank savings accounts, but even the top-paying banks are shelling out only 1 percent interest (annual percentage yield) on these, and the deposits are exposed to inflation ? a 3.56 percent annual rate in June. This produces a net loss of 2.56 percent annually in the buying power of the saved money ? totally inappropriate for what should be our long-term saving goals.

Oftentimes, beginners are poor financial consumers who buy inappropriate financial products they know next to nothing about.

The institute says the most successful saving and investing strategies are also simple and easy to understand. Deciding when to start is the hardest part.

Take advantage of resources teaching the basics, often found at public libraries, cable TV shows and online. Considering the importance of the task, a stockbroker, insurance agent or financial planner should play a major role. Mastering the basics will help you work more effectively with your financial professional to create and maintain an effective saving and investing plan.

If you save $50 a month and earn 8 percent per year, after 10 years you?ll have $9,147.30 ? $6,000 that you saved and $3,147.30 in what it earned through compounding interest. After 30 years, the fund will have grown to $74,518 ? $18,000 saved and $56,517.97 earned through compounding.

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Trained adviser best choice for investments

Everyone needs a trained financial adviser. The old saying, ?He who is his own lawyer has a fool for a client? has a parallel: ?He who is his own financial adviser has a pauper for a client.?

For a list of the professional organizations certifying financial planners or chartering financial consultants or retirement planners, see the June 15 Consumer Page at tulsaworld.com/ACT061511 (http://tulsaworld NULL.com/ACT061511)

Call or visit local financial services firms to ask for printed information, suggests the Employee Benefit Research Institute. These professionals will belong to major firms that attract investors with their good reputations, not their free lunches.

Pick at least three advisers and call them for interviews. Once you complete your investigation, narrow your list of potential candidates to those you wish to interview. A good professional understands the selection process and will answer the following questions fully and honestly.

Ask if you can submit your questions in writing and have their answers returned to you in writing. Here are some possible questions to ask:

• What is your area of expertise?
• What is your educational background?
• What financial planning credentials have you earned?
• What further education in financial planning do you plan to pursue?
• Are you a member of any professional financial planning associations?
• How long have you been offering financial planning services?
• Will you provide references?
• Have you ever been cited by a professional or regulatory governing body for disciplinary reasons?
• In the last year, how many clients have stopped using your services and why?
• Do you do the work or will I be turned over to another employee in your firm?
• What is your approach to saving and investing?
• Will you provide an individualized financial plan? Can I look at a recent example of a plan prepared for someone in similar financial circumstances?
• What kinds of communications can I expect from you on an ongoing basis (account statements, newsletters, etc.)?
• How often will you review my portfolio?
• How are you compensated for the services you provide?
• How are fees calculated?
• On average, how much can I expect to pay for your service?
• What do I receive in return for that fee?
• What, if anything, do you expect of me during our relationship?

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Personal finance resources

The Employee Benefit Research Institute suggests these options for learning how to begin saving and investing for the future. In these uncertain financial times, we might discover the only ones looking out for us is us.

Magazines: Money, Mutual Funds, Worth, Individual Investor, Smart Money and Kiplinger?s Personal Finance

Books: Eric Tyson, ?Personal Finance for Dummies?; David Chilton, ?The Wealthy Barber: The Commonsense Guide to Successful Financial Planning?; Beth Kobliner, ?Get a Financial Life: Personal Finance in Your Twenties and Thirties?; Terry Savage, ?The Savage Number: How Much Money Do You Need to Retire??; and Lois Vitt, ?You and Your Money: A No-Stress Guide to Becoming Financially Fit?

Centers: Morningstar Mutual Funds Center, Value Line Investment Survey, New York Stock Exchange and Financial Industry Regulatory Authority

Televsion:?Wall Street Week? (PBS), ?Clark Howard? (HLN), ?The Money Wheel? and ?Fast Money? (CNBC), and ?Nightly Business Report? (PBS)

Budget financial planning software: Money (Microsoft), Quicken and Quicken Financial Planner (Intuit), and Managing Your Money (Meca)

Internet: finance.yahoo.com, Prodigy personal finance chat rooms, Stockmaster.com, Bloomberg.com, CNNFN.com, USAToday.com (http://USAToday NULL.com) and SEC.gov (http://SEC NULL.gov)

Original Print Headline: Personal finance 101

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Tulsa World consumer writer Phil Mulkins wants to know which topics interest you. Call 918-699-8888, email your suggestion to phil.mulkins@tulsaworld.com or mail it to Tulsa World Consumer, P.O. Box 1770, Tulsa, OK 74102-1770.

Article source: http://www.tulsaworld.com/site/articlepath.aspx?articleid=20110817_15_E4_CUTLIN289415 (http://www NULL.tulsaworld NULL.com/site/articlepath NULL.aspx?articleid=20110817_15_E4_CUTLIN289415)

Source: http://smartmoneycash.com/2011/08/17/personal-finance-101-start-simple-with-savings-investments/

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