Be an Informed Investor

Even before you consider investing your money, you should have a financial plan. It's easier than you think if you start with the basics:

  Identify your financial goals (saving for a home, education, comfortable retirement, periods of unemployment);
  Identify your current financial status;
  Spend wisely and keep debt to a minimum; and
  If needed, find a professional for assistance

The U.S. Securities and Exchange Commission has a Web publication, "Get the Facts: The SEC's Roadmap to Saving and Investing" that can help you create a personal financial plan.

Seeking Financial Professionals

You've worked hard for your money; therefore, it's important to do your homework before trusting it to financial experts. Arm yourself - always ask questions:


The best defense against getting cheated when it comes to investments is to ask questions.

Watch our video Be An Informed Investor on YouTube.

  • Are you licensed to sell these financial products and are these products properly registered? Click here to verify.

  • What is your commission or fee? Or do you get paid by the amount of assets your manage? Will you get paid more for selling your own firm's products?

  • Do you have a prospectus I can review?

Remember, legitimate financial professionals are happy to answer your questions - they have nothing to hide. If the person you're working with is vague, doesn't answer your questions, or pressures you for an answer, WALK AWAY. For other danger signs, click here.

The ABCs of Designations

Organizations in both the investment and insurance industries offer continuing education and upon meeting education requirements, issue valid credentials. The credentials - usually in the form of a title or shortened acronym - a designation - assure the person is qualified to perform a job or task (example: Certified Financial Planner or CFP).

However, some salespeople give themselves titles with similar-sounding names to imply they have a certain level of expertise when in reality they might have just attended a one-day sales or marketing course, or worse, obtained it from an online site for a nominal fee.

To better protect Oregon seniors and other investors from misleading sales tactics in Oregon, salesperons may only use designations or credentials that they have legitimately earned and that meet certain educational requirements. Individuals are prohibited from using credentials that are non-existent or self-conferred or are from organizations that:

  • Primarily teach sales/marketing
  • Do not take steps to ensure students are competent
  • Do not monitor and discipline students for improper conduct
  • Do not have reasonable continuing education requirements

If in doubt, ask questions about a designation and what the person had to do to receive it. Salespeople could face civil penalties of up to $20,000 for using designations that are not backed by reputable organizations with stringent requirements.

Check with our office if you have any concerns: toll-free 1-866-814-9710.

Are you devaluing your home?


Be careful about using your home as your personal ATM for cash to invest or buy "wants."

Watch our video Protect Your Home Equity on YouTube.


Your home is one of your largest, most valued investments. It may be tempting to use it as a means to invest or buy that long-sought after vacation or a new car. Financial institutions tout home equity loans for a number of needs -- and wants.

Don't be enticed by such loans unless you have a good plan to pay it off. By continuing to use your home equity, you may be draining your best investment.

Some states are seeing salespeople convince long-time homeowners to use their substantial equity to lend money to limited-liability companies or partnerships that promise a steady stream of returns. One woman in California used $100,000 from a home equity line to invest in what she believed was a trust buying international securities. She lost all of her money (Wall Street Journal, May 15, 2010).

Reverse Mortgages

These mortgages offer those 62 years old and older a way to convert their home equity into cash. Here, the roles are reversed: the bank pays the homeowner instead of the homeowner writing a mortgage check to the bank. Homeowners can elect to receive a lump sum, a line of credit, or monthly payments. The loan is due, with interest, when the borrower dies, moves, sells the house, or fails to pay property taxes or homeowner's insurance. The heirs typically sell the house, pay the balance, and keep whatever is left.

This transaction sounds good, but look beyond the hype for the fees attached. Some fees can total five percent of a home's value. Before talking to lenders, do your homework. You may want to consult a HUD-certified reverse mortgage counselor to learn more about the options and mechanics. And for a peek into what you maybe get out of your house in a reverse mortgage, use the AARP Reverse Mortgage Calculator.

Know when an investment is a good "fit"


A good investment should "fit" your circumstances and financial needs.

Watch our video Annuities - Right For You? on YouTube.

Your investments should be a personal reflection of you and your financial needs rather than what is "hot" in the current financial market. What may work for a sibling or a friend at work may not work for you.

That's why it's important to create, and revise as needed, your financial road map. For more details on how to create yours, click here.

There are a number of financial products in the market and none are as advertised or as scrutinized as annuities. Depending on the product, investors add money over time to accumulate a sum, or they invest a single sum which then provides a stream of payments at a later point in time. The goal is usually to secure a steady cash flow for an individual during their retirement years. Annuities are a long-term investment and can be a part of your overall investment strategy - but there are limitations, including that some or all of your money can be tied up for a long period of time.

Sometimes, annuities are marketed as a one-size-fits-all product, and alarmingly, sold as "something like a CD" (certificate of deposit).These sales pitches, unfortunately, don't tell the whole story.

Before you decide on an annuity, take the time to research, as questions, and give it thought. Click here for a more thorough description and advice regarding annuities.

Recognize the danger signs

If it sounds too good to be true, then it is. This is sage advice when it comes to your money. Over-the-top sales come-ons that contain superlatives like Guaranteed!, No Risk!, and Triple Your Money! are red flags and should alert you to do cautious research before investing.

For more examples of danger signs, click here on How to Spot a Con Artist. We also have a publication, Risky Investments, that lists common investment ploys.

Investing in new technology


Be aware of exotic, new investments that are sold as a "can't lose" investment.

Watch our video Avoiding Technology Scams on YouTube.

The steam engine. The printing press. The personal computer. These inventions have contributed to revolutionizing our world. And there are others on the horizon - some legitimate and some not so legitimate.

Luring people to invest in new technology has been around for centuries and continues today due to the sometimes sophisticated methods used by scammers. Those who are looking to take your investment dollars will do their research and sometimes have a prototype invention - a "black box" - as a way to convince you to invest. And, new technologies, especially "green" energy such as wind and wave, are the newest and "sexiest" inventions to steal your money.

Do your homework. If you are approached by a salesperson with the "newest" and "greatest" technology, ask questions.

  • First, is the salesperson licensed to sell investments (securities)? And is the security registered? Click here to verify.
  • Are the details obscure and/or confusing? If so, it's best to walk away.
  • Is the salesperson pressuring you by telling you must make a decision today? A good investment will be around today, tomorrow, and the months ahead. Again, walk away.

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