Schultz - Idiots Guides: Beginning Investing

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First American Edition, 2016
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Introduction

Whether you think you can, or think you cant, either way youre right.

Henry Ford

Most likely, youre given the opportunity to select investments for your 401(k) every year at work. And every year, if youre like most people, you have no idea what to choose or whether the options you do select are the best for you. In this book, I help you make informed decisions.

But maybe youve realized youre never going to get rich through your 401(k) (or 403[b], or IRA, orwait, you do have savings, right?). We also look at how you can accumulate money to invest and how to make that money work for you.

Maybe youve never invested in anything before and arent really clear about the difference between a stock and a bond. What about mutual funds versus ETFs (exchange-traded funds, by the way), active versus passive, index versus managed? After you read this book, youll know whats right for you, how to invest in these options, and when to cash out and go home.

Do you suspect other people are in on secrets or hot tips that make them a ton of money, while you toil along with a measly return? After reading this book, youll know how they do it (or if they really do!).

Im a financial planner and investment adviser, always in that order. I believe you cannot choose investments that are right for you unless you have a plan for all the aspects of your life. No, I dont think life is all about money, but money does touch most aspects of life. How we choose our careers, where we can live, what we can or are willing to do for our children, what we can afford to enjoy, and even our health and well-being into old age are all somewhat dependent on whether we have at least adequate funds to support our lifestyle, goals, and dreams.

How you approach this book, and what you hope to get out of it, might depend on your age.

If youre 20 to 40 years old, time is on your side. Sure, youve seen something of the world. Youre current on the latest and greatest. Not only can you spot trends, you make them. This book teaches you when to act on those hunches and how to put some sober analysis to work on your initial ideas. You have time to make mistakes and recover from them as well as time to make, change, and achieve your goals.

If youre 40 to 60 years old, you probably wish you had saved more when you were younger. Even if you did invest in the stock market or contributed regularly to your workplace retirement account, you probably wish you had done a better job of understanding and monitoring your money. Maybe youre trying to make up for lost time and wonder if you should take more or less risk with what you already have. This book helps you make good judgments to improve your financial situation.

If youre 60 years old or older, maybe you just want to be a good steward of what you already have. Maybe you had a significant life changedivorce, illness, a late layoff, or early retirementand need to adjust to the changed circumstances. Or maybe youve just received sudden moneyan inheritance, pension lump-sum payout, business buyoutand you have no idea how to invest your windfall. If youre retired, you might decide you finally have time to really understand investments and can take the time to analyze and follow your choices in a way you never could before. This book helps you sort through the alternatives to decide whats the right type of investment mix for your situation.

If youve never put your money into anything more than a piggy bank, this book walks you through the decisions you need to make and shares the basic information you need to begin a lifelong investing program.

If youve made a few investments and theyve gone south, youll learn how to do it more prudently and expertly this time with the information in the following pages.

And if youve made some investments that turned out well, youll be able to analyze why and improve upon your success after reading these chapters.

When I give financial advice, I tell my clients Ive already made all the mistakes so they dont have to. It is my fond hope that I can help you steer clear of the worst mistakes, productively learn from any others, and cruise smoothly to a secure financial future in which your investments support your dreams.

How This Book Is Organized

This book is divided into five parts: