Practical Guide to Investing
Starting Your Financial Future Together
You and your spouse may have differing attitudes towards money, and different financial habits. An honest, detailed conversation about your current financial situation. It’s time to put everything on the table. Discuss your financial goals that are important to both of you.
Read this brochure, Marriage and Money (pdf). Source: Lightbulb Press and the Investor Protection Trust
Starting Your Financial Future
When you start a new job, learning the culture of your new workplace, not to mention getting up to speed on the work you’ll be doing, can be intimidating. You will also be getting a paycheck and will need to make decisions about how to spend it.
This helpful guide, Your New Job (pdf), provides an overview of the financial decisions that are part of starting a new job. Included is essential information on choosing benefits and using the power of your paycheck, as well as guidelines for making informed investing choices.
Source: Lightbulb Press and the Investor Protection Trust
Before making any investment, request and review the prospectus. Be sure to read it!
Anyone offering you an investment opportunity should give you a full description of the investment and the people and risks involved in the investment.
Read more tips on what to look for when evaluating a prospectus (pdf), including important questions to ask and where to check answers related to the investment seller, product, and company.
Investing your money can be a daunting task. Exercise a healthy dose of skepticism and take your time by researching the investment and learning how it works.
Read more about how to avoid the common investment pitfalls (pdf) that may trap you.
Small businesses sometimes raise money by selling stock or debt to the public. While this can seem like a chance to invest early in a promising company, it's very risky. Many new business fail, so avoid putting too much of your money into an unfamiliar startup.
Learn more about small business investments (pdf) before you invest and hand over your money.
529 Plans and Other College Saving Options (pdf) This guide, published by FINRA (Financial Industry Regulatory Authority), discusses your options to saving and investing wisely for college. Some important topics include:
- College Costs are Rising--Are You Keeping Pace?
- Loans--Know the Cost
- Education Benefits for Service members--Post 9/11 GI Bill
- College Saving While Saving Taxes
- Tips for Choosing College Savings Options
The North American Securities Administrators Association (NASAA), of which the Arizona Corporation Commission’s Securities Division is a member, developed “10 Tips for Online Investors” listed below to encourage investors to think carefully about making an investment online.
Read more about how to ACC-Protecting-Your-Online-Accounts (pdf) in the “Are You an Informed Investor?” publication.
With online brokerages, you can easily buy, sell, and manage investments on your own. Some people trade frequently hoping to make quick profits, but this can be risky due to fast market changes, bad information, or trade delays.
Others invest online for the long term, either on their own or with help from a broker or robo-adviser. Before investing online, take a moment to learn the basics and use trusted resources to stay informed.
Read the Robo-Adviser-Investor_Alert (pdf) BEFORE you invest.
Before buying investments over the Internet, take a few moments to read these guidelines for online investors. Also, for more detailed information about online investing, visit NASAA's online resource center.
Dealing with Investment Professionals
Why is your investment firm asking for a “trusted contact”?
A trusted contact is someone you give your financial firm permission to reach out to only if they can't contact you or something seems off with your account. This could be a family member, friend, or another person you trust.
Why add a trusted contact?
It gives your account an extra layer of protection. A trusted contact can help confirm your contact information, your well being, or who's legally allowed to help with your account.
What can a trusted contact do?
Not much - and that's the point. They can't make trades, access your money, or act on your behalf. They only get limited information to help keep your account safe.
How can you add a trusted contact to your account?
Just call your investment professional, update your account online, or follow verified instructions from you firm. You can change or remove a trusted contact at any time.
Before clicking on any link in an email notice about a trusted contact, make sure you verify with contact information in your possession that your investment firm sent the email.
Finally, keep this one-page fact sheet handy to remember important information about naming a trusted contact (pdf).
You can also view a short video provided NASAA on the importance of naming a trusted contact.
Looking for help managing your savings? Financial professionals can guide you toward your goals, especially if you don't have time to handle investments yourself.
Ask friends or family for recommendations, then interview candidates to be sure their approach fits your needs. Knowing what to ask - and how to verify their answers - can help you avoid bad advice and financial loss.
It is important to know what questions to ask (pdf) and how to verify the answers, which can save you time, frustration and most importantly, potential financial loss due to unsuitable investments and fraud.
You should you expect:
- A clear summary of services and fees
- A discussion of your risk tolerance
- An explanation of the assumptions behind your plan
- Investment options with pros and cons
Read more about how to choose and monitor an investment professional (pdf).
Before you make any investment decision, you need to consider two factors that should influence all of your choices--your risk tolerance and what investments are suitable for you.
Risk can be simply defined as the possibility of suffering a loss. The higher the return on your investment, the greater the risk you are taking.
Suitability means that the investment is in line with your investment objectives and financial situation.
Read more about risk and suitability (pdf) before you decide on any investment. Complete a investor risk survey (pdf) then compare to the score card (pdf) to determine your risk tolerance.
Seniors often become target for fraudulent or unsuitable investments because they've built up significant savings. If you're 55 or older, be cautious of anyone calling themselves a "senior specialist." Some titles are legitimate, but others require a little more than basic marketing training - and the person may not even be licensed to give financial advice.
Before trusting a credential, contact the organization that issued it and ask about their training and experience requirements. You can also look up many credentials in FINRA's "Understand Professional Designations" database located in the Investor section at www.finra.org, though it isn't a complete list and doesn't compare designations.
Arizona recognizes the following well established financial designations:
- CFP - Certified Financial Planner
- ChFC - Chartered Financial Consultant
- PFS - Personal Financial Specialist
- CFA - Chartered Financial Analyst
- CIC - Chartered Investment Counselor
Most importantly, ask and check with the Investigator on Duty at the Commission's Securities Division to confirm an investment promoters license and any disciplinary history.
Teaching Kids About Money
This guide will help you teach your child money management skills while reading " Count on Pablo (pdf)" by Barbara de Rubertis. It will do this by:
- Giving you things to think about before reading the book with your child. These can help you spot key points in the book or spark ideas to discuss later. with your child.
- Helping you prepare for an enjoyable reading time with your child.
- Providing questions to talk about with your child.
- Suggesting activities that help your child put ideas and lessons into action.
The Story
Pablo is happy to go to the market with Grandma. He counts the fruits and vegetables to sell at the market. Pablo also uses his problem-solving skills to help Grandma sell all the food at her booth.
This parent's guide called How to Raise a Money Smart Child (pdf) is resource that discusses how to raise a child who is savvy about money; includes age-appropriate, family activity ideas. Important topics include:
Ages 2 to 8
- Helping Kids Understand: Needs and Wants
Ages 9 to 12
- Build a Positive Credit History
- Piggy Banks to Real Banks
Ages 13 to 18
- How to Reconcile Your Checking Account
- Allowances...or Work...or Both?
- Credit for the First-time Borrower
Next Generation: Insuring Your Future
- How to Create a Budget
- Eight Ways to Finance College
- What is a Mutual Fund?
Kids, money does matter! Check out online games and videos to learn important stuff about saving, investing and becoming a fraud fighter on our Students and Educators page.
Check out these FREE e-Books from the Council for Economic Education's Financial Fitness for Life® Parent Guides. With simple lessons and exercises, parents can use this guide to learn about personal finance. Each subject area provides material for family discussion and an assortment of recommended activities that parents can do together with their kids to form financial habits to last a lifetime.
Kindergarten - Grade 5 (pdf) Themes include: Earning, Spending, Saving, Credit & Money Management
Grade 6-12 (pdf) Themes include: Economic way of thinking, Earning Income, Money Management, Saving and Spending and Using Credit
Money Smarts for Older Adults
Knowing how to spot a con game is essential to protecting your nest egg. This A Guide for Seniors-SEC (pdf), published by the U.S. Securities and Exchange Commission (SEC), discusses important topics you need to consider and the investor resources available to you.
You can also visit investor.gov to gather other information on wise investing and fraud prevention.
Practice saying "no." By practicing the actual words, it becomes easy to simply say, "I'm sorry, but I'm not interested. Thank you." Or tell the pushy salesperson who is offering the investment, "I never make investing decisions without first consulting my _____." Fill in the blank with a trusted, objective third party such as an attorney, accountant or family member who is knowledgeable in money matters.
Ask and check with a securities regulator. Verify the salespersons licenses status and disciplinary history by contacting the Securities Division's investigator on duty.
Read more smart tips for older investors (pdf), courtesy of FINRA.
Have you ever received a postcard or letter advertising a free meal with a financial seminar?
To avoid the heartburn of a fraudulent or unsuitable investment, read more information about attending a free meal seminar (pdf). Courtesy of the North American Securities Administration Association (NASAA), you can also find resources for mature investors at visit ServeOurSeniors.org. Get more general information about wise investing and fraud prevention.
Other Resources:
"How to Spot a Free Lunch Scam" (pdf) courtesy of AARP and a FINRA non-profit, saveandinvest.org
The Money Smart for Older Adults Program raises awareness among older adults and their caregivers on how to prevent elder financial exploitation and encourage advance planning and informed financial decision-making.
Download the materials at Money Smart – Teach – For Older Adults (catalog.fdic.gov).
Thinking About Retirement
Retiring early sounds great to most people, but it isn’t the right move for everyone. Before you take the leap, ask yourself:
- Do I have enough saved to live comfortably?
- Are my investments at the right risk level?
- Will I be pulling out money too fast?
Be cautious of “free lunch” seminars that promise easy early retirement. These pitches often rely on unrealistic returns and big withdrawals that can drain your savings faster than you expect.
For more help, check out FINRA's tips (pdf) on early retirement and avoiding scams.
As you face retirement after working for many years, you may be wondering if you are in an sufficient financial position to do so. These retirement planning resources will provide some issues to consider and give you a place to start in the process:
- Taking the Mystery Out of Retirement (pdf) (Source: U.S. Dept. of Labor)
- Facing Retirement (pdf) (Source: NASAA)
- IRA Rollover Tips (pdf) (Source: FINRA)
Consider completing the Smart Money retirement planning course online. Also, visit the Investor Tools section, to find checklists, worksheets, calculators and other resources on this website to help you plan your retirement with confidence.
A self-directed IRA lets you invest in things like real estate, precious metals, private deals, and crypto — beyond the typical stocks and mutual funds. But keep in mind: the custodians doesn’t check whether these investments are legitimate.
These accounts can be targeted by scammers. Some promoters falsely claim the custodian vets investments, pressure you to avoid pulling money out because of taxes or penalties, and rely on you not checking your account often. They also take advantage of the lack of transparency in many alternative investments.
For more details, see guidance (pdf) from NASAA and the SEC.
Transitional Phases
What is a guardian?
A guardian is someone who handles finances for a person who can’t manage them anymore. While it’s uncomfortable to think about aging or losing independence, planning ahead helps protect you, your money, and your family. If you don’t choose someone in advance, a court may appoint a guardian for you.
Can you avoid guardianship?
Yes — with some smart planning. Simple steps include setting up an estate plan, naming a power of attorney, creating a living trust, and writing advance health care directives and a will. You can also use a “view-only” bank account so someone you trust can monitor your finances without accessing your money.
The Caught in the Middle: Sandwich Generation (pdf) resource, published by the North American Securities Administrators Association (NASAA), discusses important topics you need to consider and the investor resources available to you.
Among the topics discussed:
- The Sandwich Generation: Who are We?
- Common Investment Scams
- The Red Flags of Investing
- You
- Your Children
- Your Parents
Many women face particularly daunting money challenges during periods of financial transition — marriage, divorce, job loss, retirement, sending kids off to college, and other changes to their own or their family's financial circumstances. Through specifically tailored investor education resources developed by NASAA (North American Securities Administrators Association) and on-site presentations to women's groups, women can invest with confidence and steer clear of investment fraud.
Here's why:
- 99 percent of women will be financially responsible for themselves or their families at some point (Source: Wi$eUp)
- More women than ever before – 40 percent – serve as their household's primary breadwinner. (Source: Wi$eUp)
- Nearly 2/3 of women ages 40 to 79 have experienced a major financial transition such as divorce or job loss. (Source: AARP)
- Women typically live longer than men and must be financially prepared for a longer retirement.
- Less than half of women have a retirement plan. (Source: U.S. Social Security Administration)
Read more about the various transitional phases of your financial life (pdf) and the considerations you should make.
Many women face money challenges during their lifetime— marriage, divorce, job loss, retirement, sending kids off to college, and other changes to their own or their family’s financial circumstances.
To help you begin to take control of your financial future, review this Financial Empowerment for Women (pdf) information.
For important tips for women about their retirement savings (pdf), read this handy resource by the U.S. Department of Labor.
