Investing - What You Need to Know

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Investigate Before You Invest
Tips on Dealing with a Financial Planner
Questions to Ask in a Preliminary Interview
Finding a Financial Planner
Negotiating Fees
Some Investment Questions to Consider
How to Check your Credit Rating
Social Security Hotline
Pension Funds: Where to Go to Get Help

Investigate Before You Invest

Today, millions of citizens own corporate stocks, bonds, mutual funds and other forms of securities. Whatever the choice of investment, make sure that you have complete and accurate information before investing to ensure that you use your funds wisely.

• Before buying, think carefully about what you're trying to accomplish.
• For referrals consult experienced professionals you know and trust, like your banker, friends or family.
• Beware of securities offered over the telephone by unknown people.
• Don't listen to high-pressure sales talk.
• Beware of promises of spectacular profits.
• Get all the facts! Don't buy on tips and rumors.
• Understand all written information or consult a person who does.
• Give at least as much consideration to buying securities as you would to buying other valuable property.
• Beware of "confidence" schemes. If you're promised "quick profits", "a sure thing", "double your money", be skeptical!
• Ask for everything in writing. Reputable securities salespeople will be happy to mail you a "prospectus" or "offering circular" on any security that you're considering. Save all documents.
• Be prudent. Don't invest until your financial situation permits. Have you made provisions for a home? Life and health insurance? Savings?
• Keep accurate records of all conversations with your broker-including date, time, amount and price of each security purchased or sold, availability of prospectus, and trade date in order to verify statements received from your broker every month.
• Follow your investments. After you have invested keep tabs on your securities.

For information on how to invest money contact the Securities and Exchange Commission at 213/965-3998 or web site: http://www.sec.gov.

Tips on Dealing with a Financial Planner

If you decide to hire a financial planner, he/she should analyze your finances and recommend how to improve your financial situation. Successful financial planners may have as many different investment strategies as the clients they serve. Make sure the financial planner you choose works on behalf of your interests and needs.

A financial planner should assist you in the following ways:

• Assess your relevant financial history, such as tax returns, investments, retirement plan, wills, and insurance policies.
• Help you decide on a financial plan based on your personal and financial goals, history, and preferences.
• Identify financial areas where you may need help, such as building up a retirement income or improving your investment returns.
• Write down a financial plan based on your individual situation and discuss it thoroughly with you in plain English.
• Help you implement your financial plan, including referring you to specialists, such as lawyers or accountants, if necessary.
• Review your situation and financial plan periodically and suggest changes in your program when needed.

Finding a Financial Planner

• Institute of Certified Financial Planners (organization that accredits planners) at 800/282-PLAN or web site: www.icfp.org, or
• The International Association of Financial Planning (association of individuals who work in the financial planning industry), 800/945-4237 or web site: http://www.iafp.org.

Be certain that any planner you consider hiring has ample knowledge of taxes, insurance, estate and retirement planning issues, as well as the basics of investments and family budgeting.

Questions to Ask in a Preliminary Interview:

• What credentials in financial planning do you have?
• What exactly is your background and experience in financial planning?
• Are you registered with the Securities and Exchange Commission or with a state agency?
• How would you prepare my financial plan?
• How many companies do you represent?
• Who will I deal with on a regular basis?
• What are your fees?
• How do you keep up with the latest financial developments?
• Will you be involved in implementing the plan you suggest?

Negotiating Fees

There are a variety of fee options that you should explore to see which serves your interests best:

• Fee-Only Financial Planners - They base their charges on gathering your financial data, analyzing it, and recommending a plan of action. Hourly or flat fees are most common.
• Commission-Only Planners - Some planners charge no fees for service to their clients but make their money instead through commissions paid through investment products they sell.
• Fee and Commission Planners - Some financial planners receive payments from both a sales commission and a fee.
• Written Estimate of Fees and Services - Make sure you get a written estimate of what services you can expect for what price. Compare this estimate with others and select the package that best meets your needs.

Some Investment Questions to Consider

How to Check your Credit Rating

Today it's virtually impossible to purchase anything on credit without someone looking into your lifelong financial report card--your credit record. Mistakes can happen and it's up to you to make sure your credit record is accurate.

The major credit reporting company in California is Experian 800/422-4879. To receive a courtesy copy of your credit report, call and you will be told how to send in a written request. When you get your report, examine it carefully for errors. You have the right to take certain actions to correct the record if you find errors.

The Federal Fair Credit Reporting Act allows you the following rights:

• Any credit bureau must provide you with a complete report of the information in your credit file when you request it.
• You can dispute any information in your file or get missing data added to your file. You can put your side of the story in the credit file.
• If you request it, all potential creditors and employers who have made inquiries into your file in the past two years must be notified of errors that have been corrected.
• Any negative information about you will be removed after seven years, and any bankruptcy information after ten years, provided you request it.
• You can insist that only legitimate members or users of the credit-reporting agency have access to information in your file.
• You are entitled to know why you were denied credit.

Social Security Hotline

For an estimate of how much your Social Security benefits will be, you can call and request an estimate and detailed report. You can also get informative publications on Social Security benefits by calling 800/772-1213 or web site: http://www.ssa.gov. TDD users call 800/325-0778.

Pension Funds: Where to Go to Get Help

The U.S. Labor Department's Pension and Welfare Benefits Administration (PWBA) advises you to protect your pension rights:

• Retain a copy of the summary plan description that outlines the benefits your plan provides.
• Obtain, review and keep on file your individual benefit statement records that document your work history.
• Notify your pension office of a change in your status, such as a marriage, divorce or death of a spouse.
• If you change jobs, notify former employers of your current address.

The PWBA will answer questions about your pension rights and give advice to help you secure your pension. PWBA advisers can be reached at 202/219-8776, or call the California Regional office, 818/583-7862 or web site: http://www.dol.gov/dol/pwba.

If the company has moved or gone out of business and you can't locate it, write the Pension Benefit Guaranty Corporation (PBGC), 1200 K Street NW #930, Washington, DC 20005. Call 202/326-4000 or web site: http://www.pbgc.gov.

There is now a book available called "Where to Look for Help With a Pension Problem" that may be of service to you. It explains briefly and clearly how to make a claim against a private pension plan and lists resources for prodding government agencies to take action on under-funding, mismanagement and fraud. Copies are $8.50 from the Pension Rights Center, 918 16th St. NW #704, Washington, DC 20006-2902.

Please don't forget your local library or bookstore. Today more than ever you'll find books and magazines that specifically address issues on retirement planning, investing and finances.