Your journey to financial freedom can seem daunting. But remember, you don’t need to be a financial expert. All you need is a solid foundation of basic financial education in order to make wise financial decisions and work effectively with your financial advisors. To steady your course, here are eight basic principles of investing that you should know:
1. There is no single perfect investment
When investing, it is necessary to weigh the advantages and disadvantages of each investment type and to select the investment options that most closely fit your circumstances and personal goals.
2. Risk and reward are proportional
It is important for investors to understand the risk/reward ratio of the investments they currently own and considering to purchase. Generally, the greater the potential reward of an investment, the higher the risk associated with it. Different investment vehicles carry different levels of risk.
3. Minimize risk and maximize reward
Diversification is based on the knowledge that different categories of investments respond differently to the same economic conditions. A strategy for managing risk and boosting returns is to diversify investments across industry and investment types. Asset allocation is an important component of diversification. It involves deciding what percent of your total investment portfolio should be allocated in each of the investment categories.
4. Compounding interest is powerful
Compound interest is growth through multiplication. Interest or earnings deposited back into an investment on a regular basis will increase the size of the asset and its ability to generate still more earnings in the future. According to Jane Bryant Quinn, nationally syndicated financial columnist, “Compounding is a true perpetual money machine.”
5. Pay yourself first
One technique to help individuals spend less and save more is the “pay yourself first” method. That means that with every paycheck, and before any expenditures are made, a predetermined amount or percentage is transferred to personal savings. This assures that saving takes priority and occurs on a regular basis.
6. Practice dollar cost averaging
Dollar cost averaging is investing a fixed amount of money at regular intervals (usually monthly). With this method you will sometimes be buying when prices are high and sometimes you will be buying when prices are low. Over the long-term, your average cost will likely be lower and your return higher than if you tried to time individual purchases to market swings.
7. Avoid market timing
Market timing is an investment strategy that involves trying to outguess market movements. Essentially, it means buying before the market goes up and selling before the market goes down, this strategy rarely outperforms the investor who buys and holds.
8. Maximize tax favored retirement plans
Your best investment “bargains” are tax favored retirement plans. They offer two types of tax advantage: tax deferral and tax deductible. Tax deferral means that taxes are not paid on investment earnings until withdrawal of funds. Tax deductible means that contributions made to a tax favored retirement plan are excluded from your reported income and are thus free from federal and state income taxes. Keep in mind that eligibility requirements vary for these plans and the “tax breaks” they offer.
Reprinted by permission of Money Quotient, NP
Simple investing for a measurable return has begun to change; becoming more socially conscious, ecologically conscious and yes, financially conscious. Investors from all walks of life have begun to realize that the value of their investments can be directly tied to their personal values, helping to create a more just, sustainable world. In fact, Socially Responsible Investing (SRI) has now evolved to include Environmental, Social, and Governance (ESG) as factors in the investments that socially conscious investors are making.
A while back I posted to this blog about the importance of managing the family cash and the best way to get it done; with the 
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There are two “best times” to begin your financial planning for college; Now and Before Now! In fact, the earlier you begin, the better. With college costs what they are these days, you simply cannot afford to wait until your student enters high school to begin educating yourself about college costs and financial aid; just as you can’t afford to wait until your student is in middle school to learn about them.
As a certified finance planner I not only spend my days helping couples and families reach their financial goals, I also spend a great deal of time studying the latest financial news and investment trends. Doing this is certainly not a glamorous part of my professional life but is definitely necessary if I am going to be helpful to my clients. It’s all part of the job, you know?
©2013 Cynthia Klein has been a Certified Parent Educator since 1994. She works with dads, moms and organizations who want more cooperation, mutual respect and understanding between adults and children of all ages. Cynthia presents her expertise through speaking, webinars, and private parent coaching sessions. She is a member of the National Speakers Association and writes the Middle School Mom column for the magazine Parenting on the Peninsula. Contact Cynthia at bridges 2 understanding, 
There was a time not so long ago when a student’s primary goal was getting accepted into his or her college of choice. Once that hurdle was cleared, the family then began to think about how they would cover the cost. As college costs have risen, concern about financing a college education has become a significant factor in the college choice process for many families.
In The Three Boxes of Life: And How to Get Out of Them, author Richard Bolles described the three periods of life as (1) getting an education, (2) going to work, and (3) living in retirement. He observed that these periods have become more and more isolated from each other.
