| The question is how to invest money to make | | | | winner into a loser. For example, a good simple fixed |
| money. The answer is to invest money only after | | | | annuity will pay a competitive interest rate and will |
| asking a few questions about investment basics. Here | | | | have no charge to invest or hold; and no charges to |
| are the questions to ask, and how to invest money | | | | cash in after just a few years. The wrong annuity |
| to avoid scams and bad deals in general. | | | | contract can cost you 3% or more a year in charges |
| How to invest money, rule #1, is that there is no | | | | and fees, plus heavy charges if you cash out in the |
| such thing as a perfect investment. A perfect | | | | first few years. |
| investment would have the following features: | | | | Be real careful when an investment promises tax |
| guaranteed safe, guaranteed to make money and | | | | breaks. Ask questions first and get it in writing |
| lots of it, high liquidity, zero costs and expenses, big | | | | before you invest money. Then, run it by your tax |
| tax breaks, and easy to monitor... so you always | | | | professional if you have one. If you don't, take a |
| know where you stand financially. All investments can | | | | pass. Your goal is to invest money and make money |
| be compared based on investment basics, but no | | | | in the process. Not to take a chance and wind up in |
| honest proposition contains all of the above features. | | | | trouble at tax time. |
| A scam will generally IMPLY that safety and high | | | | Our last area of concern in regard to how to invest |
| profits are guaranteed. Your first question before | | | | money and investment basics I refer to as |
| you invest money: what are the specific guarantees | | | | VISIBILITY, or the ability to monitor your |
| for safety and investment returns? If the answer | | | | investment. After you invest money, then what? Can |
| you get sounds confusing or misleading, you have no | | | | you track the value of your investment so you know |
| need to ask any more questions. Something is rotten | | | | where you stand financially at all times? Will you |
| in Denmark, since no investment offers high safety | | | | receive statements each quarter and at the end of |
| and high profits... except scams. Now, let's move on | | | | each year showing the value of your investment |
| to some other investment basics and questions to | | | | assets? |
| ask. Remember, a large part of knowing how to | | | | As a financial planner, some of the worst horror |
| invest money involves knowing how to avoid bad | | | | stories of new clients I interviewed were brought to |
| investments or those that don't fit your needs. | | | | light when I asked to see their records for the |
| Ask about LIQUIDITY. How quickly and easily can | | | | investments they held. Sometimes their records or |
| you get your money back if you want to cash in? | | | | statements were incomplete or otherwise |
| What will it cost you? This is a very honest question, | | | | questionable. Sometimes, these investors could find |
| and the answer you get should be straightforward. | | | | no records at all and didn't know who to contact to |
| You're out to invest money to make money; not to | | | | find out the status of their investment. That's a |
| get stuck with a loser that will cost an arm and a leg | | | | perfect example of how to invest... NOT. |
| to liquidate. | | | | Before you invest money, sort out the investment |
| The COST OF INVESTING is another investment | | | | basics covered in this article to avoid scams and |
| basic you need to ask about. Most investments | | | | other major investment mistakes. Don't be afraid to |
| involve charges and fees to buy, hold, and/or sell. | | | | ask the questions presented here. If you are dealing |
| Many times the details are in the fine print, so make | | | | with honest people, they will be glad to answer your |
| sure to ask upfront. High investment costs can turn a | | | | questions. If not, look someplace else. |