When it comes to smart investing some people turn to financial advisors, some read books, and some watch financial "gurus" on TV like Suze Orman or Jim Kramer. There's so much information out there that it can be hard to sort the good advice from the bad. Finance expert Sheryl Marshall joined Boston Public Radio to over some of the best sources for financial advice.
- Read Pound Foolish by Helaine Olen. Most of the financial advice books out there are "bunk", says Marshall, but Pound Foolish takes "gurus" and bad financial advice to task and debunks common myths (ex: if you stop spending money on lattes, you'll be rich).
- Pull the curtain back: Make sure the financial planner you speak with is fee-only. That means the planner isn't getting paid by a mutual fund company to sell you funds. Do your homework and research the financial planner you meet with. If you go to a brokerage firm ask them if they are being compensated based on what you buy.
- Investment clubs are one of the greatest learning tools you can have. The point is to make money and be educational on a group level. Find a group of people and commit a certain amount-be it weekly, monthly, yearly- and decide to buy a stock portfolio. People can take turns researching different stocks in different areas of the market to invest in.
- Familiarize yourself with basic financial terms. Do you know the difference between a stock and a bond? Do you know what APR means? Or, what a margin interest rate is? Understanding the basic financial terms before you meet with a financial advisor is essential. (Marshall recommends reading Personal Finance for Dummies)
- Take advantage of your company's financial services. If your company has signed up with a brokerage or mutual fund firm like Fidelity, Charles Schwab, or TD Waterhouse, financial advice and education comes with that. Those funds have been "sold to you" and their skin is already in the game. You can get a lot of good advice and people don't take advantage of it the way they should.
Marshall's final piece of advice: Get savvy. A little bit of work will go a long way.