Saturday, 16 June 2012 18:12

Home Buying | Is Buying Right For You?

June 18, 2012 

Knowing when to buy a home comes down to one thing and one thing only: it’s time when you decide its right. Yes, you have to deal with banks, real estate agents, saving money, and finding the best home for you wherever you are at in life. But the first step is being mentally prepared for the big decisions ahead. 

It’s common for a woman to see owning a home as a symbolic change -- it represents a new level of growth and responsibility.  Choosing the colors you’ll paint your walls, the carpets, the furniture, and which appliances you’ll need are all big decisions that can feel extremely liberating to make!  And most liberating of all?  Putting your hard-earned cash towards your own mortgage instead of paying rent to someone else.   If you’re thinking about taking the plunge, you might feel a little overwhelmed by the entire process.  I’m here to make it all a little less scary for you with some simple tips to get started.  

Get Some “Home Buying Help” 

Buying your first home can feel like wild roller coaster ride into the unknown. But roller coasters are fun right? You can find help and inspiration by watching home buying shows (HGTV never fails!), reading the how-to guides, and asking your friends how they went about buying their home. Do it all. And if information overload sets in, don’t get stuck looking at other people’s homes on Pinterest.  Sure, it might be fun, but it’s not getting you any closer to your goal. Take that next step; meet with a realtor and a loan officer.

 A realtor can answer all of your home-buying questions and help you determine the best plan of attack in getting your search started.  The most obvious question you’re going to have to answer at the very beginning of this process is “what can I afford?”  Ask your realtor for referrals to a loan officer.  Figure out what you are willing and able to pay. Knowing your financial comfort zone will help guide and direct your search. 

Know Thy Realtor 

It is very important that you are comfortable and confident with your realtor and your loan officer; you will be working closely with them when you do decide it’s the right time for you to buy a home. Your realtor will be learning all about you, from details about your lifestyle, to how you want your home to look and feel. Your loan officer will be gathering all of your financial information; tax returns, pay stubs, bank statements, and running your credit. Eek! Before you hand over all of your financials, make sure you trust and respect this person. If not, don’t give up--there are others who will be glad to help you. Don’t settle! 

It’s Your Money, Honey

When I bought my first home, I was so overwhelmed that I almost backed out, and I was a practicing realtor! You would think that since I spent my time helping others buy and sell their homes, it would be a piece of cake for me to do the same thing for myself. Not! The main issue was my loan officer.  She spouted off all these numbers and loan options at me, and never took the time to figure out my full financial picture.  Buying a home is more than just decimal points and percentages -- while money is a massive part of it, there are other factors that need to be taken into account.  This loan officer missed that memo.  Not cool.  Like I mentioned earlier, if something feels wrong with either your realtor or loan officer, find someone else!  You don’t want a dark cloud hanging over such a huge and exciting new step in your life.

Luckily, my realtor talked me through all of my hesitations and I did end up buying a home.  I learned a very powerful lesson from the experience, and I try to pass it on to my clients. The lesson is, quite simply, “it’s your money, honey!”  Don’t let anyone tell you what to do with it unless you’re comfortable with the advice.  If something feels wrong, it probably is.  Knowing what you are comfortable with and financially qualified to buy will help guide your search and prevent you from overpaying. 

To break it down for you one more time: First, decide you are ready for the opportunity. Second, gather information. Third, find a realtor and a loan office that you trust.  These three steps will create a solid jump off point toward buying your first home.





Published in Business
Saturday, 02 June 2012 16:45

Job Hunting | Post-Grad Job Search

June 4, 2012 

Congratulations Graduate! Your hard work over the past 4 (or 5 or 6!) years has paid off and you’ve graduated. You’ve probably been celebrating non-stop for weeks and you deserve it. But now that all of the graduation festivities are over, and you’re actually face to face with the real world reality sets in:  And that means it’s time to find a job. Oh, joy. Let’s look at the tough news first: although things are turning around, it’s still a hard job market and 1 out of 2 college graduates will either be unemployed or underemployed.   Now the good news: there are several ways for you to stand out from the crowd to make sure you’re able to snag the job of your dreams.

1.    Get Clear

I graduated from college with a glossy new degree in Communications… and no idea what I wanted to do with it. I ended up taking the first job that came my way and spent several years trying to figure out what I really enjoyed doing. It would have been much easier to get clear on what I loved doing first and then go out and look for jobs that fit the criteria after. Got to love hindsight, right?

Begin thinking about what you enjoy doing. Which courses did you particularly like and what organizations did you love being a part of.  While you’re at it, get a good sense of your deal breakers. For example, if you know you hate working with numbers, that accounting job may not be for you. Lastly, think about your strengths. What are some things you’re super awesome at and what types of jobs would allow you to showcase your awesomeness on a day-to-day basis.

2.    Get Social

I would venture to say that one of the most important aspects of the job search is networking – both online and offline. Hiring managers are people. And people are more keen on giving opportunities to people they know, like and trust. Begin by working your current network. Hey, what are friends for? Let everyone in your circle know that you’re looking for a job and more importantly what type of job you’re looking for. Reach out to your alumni group to get on their list of upcoming networking events. Research your desired industry so that you can attend industry specific events. Networking is nothing without proper follow-up. Make sure to follow-up with everyone you meet within 48 hours so you can continue to nurture that relationship. I see a lot of coffee dates in your future!

3.    Build A Personal Brand

We covered offline networking in the previous point, now let’s focus on building your online network. The best way to set yourself apart from a crowd in today’s job market is to create a killer personal brand.  Create a simple online portfolio to begin showcasing your strengths – create a website using wordpress.com or sign on to about.me. Think of this as an extended resume where you can include more information on why you would be an excellent candidate for a job in your industry.

Start using social media tools such as LinkedIn and Twitter to connect with individuals and companies in your desired industry.  With these tools, you can connect with the movers and shakers in your desired field as well as begin sharing pertinent information to further showcase your skills. Show future employers exactly why you’d be the perfect addition to their team.

4.    Do Your Research

Repeat after me: No More Generic Cover Letters. Do not even think about copying a cover letter template and simply changing the company name. Show potential employers that you truly understand their company and department by conducting thorough research before submitting your resume and cover letter. Use the cover letter to truly convey how much you would like to work for their company and why they would be foolish to not have you on board. You can also use the cover letter to showcase a little bit of your personality.

5.    Stay Positive

Searching for a job is hard work and it’s easy to become frustrated when things don’t seem to go your way. It’s important to stay positive and keep moving forward towards your goal. Create a structured plan of how you’re going to attack the job search and then work through your plan. Be sure to reward yourself as you hit milestones and keep your positive attitude. You never know when you’re going to meet your future employer and you want to be in a positive, upbeat mood when you do.

The most important part of your job search is being organized and persistent. With the right attitude and these tips you will be off to a great start! Good Luck!

Published in Job Hunting

May 7, 2012

You have worked hard to establish a great career--no small feat during an economic recession--and now you are ready to put your money to work for you. But where to begin? Should you hire a financial broker, or become an independent investor? Play it safe with bonds, or play the stock market?  Before you resort to stuffing cash under a mattress, take these five steps toward investing…straight to the bank. 

1. Get Financially Literate. Some investment terms you should know include:

Stock/ Equities - If you own a stock, you own part of the company. A stock is evidenced by a paper certificate.

Securities - Includes stocks, bonds, and bank deposits. 

Bond - A bond is a debt investment in which an investor loans money to a corporate or government entity that borrows the money for a defined period of time at a fixed interest rate. The main categories of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds.

Market Capitalization - Also known as “market cap.” It is calculated by multiplying the current price per share of a stock with the number of shares outstanding.

Mutual Fund - An investment company that combines the money from a large group of investors to buy stocks and other investments.

Dividends - A portion of a company's profits that is paid out to shareholders on a quarterly or annual basis. 

These are the most commonly used terms in investment and knowing what they mean will help you understand stock roundups in The Wall Street Journal, Yahoo Finance and Dow Jones. When I first tried to calculate a company’s market cap it took me two hours, simply because I didn’t know what it meant. Now that I know the lingo, I can look at an analyst report and easily follow the progress of a stock. I’m no expert, but I know enough to play the game. 

Photobucket  Photobucket  Photobucket

After brushing up on your fiscal vocabulary, read Lois P. Frankel’s Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money.  I love the advice she offers women about diving into investment and not waiting on “Prince Charming” to take care of their finances. Use the workbooks and self-evaluations in the book to establish and monitor your progress toward financial goals. 

Another great read is Douglas R. Andrew’s Millionaire by Thirty: The Quickest Path to Early Financial Independence. Andrew claims that young professionals can achieve financial independence at an early age by investing. He suggests alternatives to the traditional 401k to make the dream of early retirement a reality.

The Richest Man in Babylon uses parables and layman terms to deliver investment basics and emphasize the importance of growing your money. My dad gave it to me when I was only seven and I often revisit the principals outlined in this book. The common sense advice helps keep me in check when I’m tempted to splurge during a sale at H&M.

Also, get in the habit of scanning Investors Business Daily, The Wall Street Journal and Yahoo Finance for the latest news and market trends.

2. Do Your Research. Before you invest in anything, do your homework. Publicly traded companies want your money, so they make it easy to find pertinent information. Check out their websites to find earnings reports, mergers and acquisitions news and stock quotes. Knowing everything you can about a potential investment is crucial to making a wise decision. Supplement your research with facts from Hoover's Company Profiles. This is an invaluable web resource that offers additional material about company management and executive profiles. 

3. Stay Connected. Once you have done your research and decided which companies you want to invest in, it is smart to stay in touch with an online financial community. Social media is a great tool for networking with investment pros and getting the inside scoop on smart buys. Try Stocktwit, a social networking platform where you can “share ideas and learn from passionate investors and traders.”

4. Don’t Invest What You Should be Saving. Investments should be a part of your overall financial strategy; however, it is important to establish good saving habits first. Create an emergency fund, open a retirement savings account and pay off outstanding credit card debt before playing the stock market. Pay yourself first and you should have extra money to invest in no time. 

5. Diversify Your Portfolio. Once you have savings and understand your investment options, it is important not to place all your eggs in one basket. Diversification is the practice of spreading money among different investments to reduce risk. A well balanced portfolio of investments is more likely to withstand fluctuations in the volatile financial market. The U.S. Securities and Exchange Commission offers great advice on steps you can take to diversify your investments for maximum returns. 

Investing is key to financial independence. You want the freedom to travel, buy a home or retire early, but savings alone won’t get you there. The average annual percentage gain for a high-yield savings account is one percent. Compare this to the average 10 percent earned on stocks. When you save, your money doesn’t work for you and you will only have as much money as you set aside from your salary. When you invest, your money grows by earning interest. So, determine your financial goals, study up and take your first steps toward a wealthy future.

Published in Personal Finance
Monday, 23 April 2012 09:10

Are You Covered? Insurance Review

April 23, 2012 

Insurance is used as a way to protect ourselves, our loved ones and the things we own against unexpected events that happen in life.  It would be lovely if you could set it up and forget about it, but as you work on building your financial foundation, your insurance coverage just becomes another area that you should review on a regular basis.  

While there are many types of insurances you may need as you progress through different life stages, here are a few you need to know about now: 

1. Disability Insurance

Simply stated, disability insurance protects your income.  According to the Social Security Administration, just over 1 in 4 of today’s 20 year-olds will become disabled before reaching age 67!1 And 67% of the private sector workforce has no long-term disability insurance.  Most people think of disability insurance as a waste of money because they think nothing bad will happen to them to keep them out of work but the reality is…it happens. You go skiing and break your leg or (God forbid) you get seriously sick. What happens then? 

As you move toward financial independence it is crucial that you protect one of your most significant financial assets: YOU! Your ability to earn an income is what funds your life and allows you to save for your goals.  Without it, you may lose everything you have worked so hard to build and save. Disability insurance is what pays you an income if you become too sick or injured to go to work.  In general, disability insurance policies usually replace about 60 percent of your annual earnings for a specific period of time (2 years, 5 years, to age 65).  If you are lucky, you may have an employer that offers a group disability insurance coverage as a benefit.  If not, you should look into individual disability insurance, which on average should cost between 1 and 3 percent of your annual income.

2. Life Insurance

My motto: If you love someone or owe someone, you need life insurance.  Why?  Because your debts don’t die when you do and you’re going to want to make sure your loved ones are taken care of financially should something happen to you.  It makes sense to review your life insurance needs on a regular basis to ensure that you are adequately covered for your current financial situation and goals you’re saving for.  Usually you will want to get enough in life insurance to leave your family with enough money to cover the bills and replace your income if you were no longer here.  If you have kids or other dependents, life insurance will provide your survivors with an income stream or lump sum to replace your income.  

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Parents who stay home and care for the children also need life insurance.  If something happens to you, who is going to stay home and take care of the kids?  Your surviving spouse can stop working to care for the kids or hire childcare.  Both require money.  Since there are many types of life insurance out there, it is wise to do your homework and understand the basics of the different types of life insurance.   For more information on the different types of life insurance, check out this article on Investopedia, Intro to Insurance: Types of Life Insurance.2

3. Long term care insurance

In 1940, the life expectancy of a 65-year-old was almost 14 years; today it's almost 20 years.1   With life expectancies rising, more and more people will find themselves needing some sort of long term care.  Long term care insurance provides assistance to people who are in need of either in-home care or a long term care facility. The average cost of a private room in a nursing home facility in California for 2011 is about $91,250 per year!3 With the costs of long term care increasing at about 7% annually, you can see why individuals of all ages are starting to heavily consider this type of insurance.  Keep in mind that while some think Medicare covers long term care costs, Medicare only pays a portion of the first 100 in a skilled nursing home, the rest is paid by you.  For more information on Medicare, visit their website at www.medicare.gov.4 If you have parents who are in their 50s and 60s, you may want to look into long-term care insurance with them. If they need care later in life, you may be the one who has to care for them.  This is an emotional, physical and financial responsibility.

Financially Wise Women Quick Tip:

Here are some quick tips to help you get some of your insurance needs in shape:

1. Review your insurance coverage today.  Protection planning is a key part of your financial plan, as you want to protect yourself against unexpected events.  Buying insurance helps shift some of the risk to an insurance company and helps protect your financial foundation.

2. Make sure to take advantage of the insurances offered through your employer.  These are usually easier to qualify for and cheaper to you since the policies underwrite a large group of people, helping the insurance company minimize its risk and therefore keep the cost down.

3. Make sure you understand the types of insurance policies you currently have and what your insurance needs are.  Work with an insurance professional to identify any gaps in your insurance policies.

4. Review your insurance policies regularly. just like any financial strategy, you’ll want to make sure you review on a regular basis and make any necessary changes or amendments to your coverage as you progress through life stages.

For further information I invite you to check out my blog www.Financiallywisewomen.com or email directly at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Brittney Castro is not affiliated with MadeWomenMag.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. California Insurance License #0F33895.


Sources and Links:

  1. Social Security Administration-Basic Fact Sheet- May 17, 2011
  2. http://www.investopedia.com/university/insurance/insurance8.asp#axzz1S1tAuGCw
  3. http://www.genworth.com/content/products/long_term_care/long_term_care/cost_of_care.html?WT.srch=1&WT.mc_id=ps_ltc_coc11_v1
  4. www.medicare.gov
Published in Business

April 9, 2012

We all see them. The graphic images on Pinterest and Facebook like this one. Food porn. They lure you in and trick you into thinking you really can squeeze a gourmet lunch or breakfast everyday into your budget. But when was the last time you actually calculated the cost of your breakfast?  I calculated the cost of mine the other day just out of curiosity and was pleasantly surprised that it was only a whopping $1.96 every day!

Breakfast Breakdown 

  • Bananas- I buy a bunch of bananas every week and usually can get 6 for $1.29, 1 banana = $.215
  • Oatmeal- I eat two individual packets of regular oatmeal, 6 packets to a box, box cost $2.50, 2.50/6= $.42 x 2 packets= $.84
  • Coffee- I buy Starbucks coffee and I brew it at home- One pound cost $9.95 and can last me 14 days = $.71 per day
  • Soymilk- I buy a carton that last about 10 days- one carton cost $1.99= $.199 per day

Grand total= $1.96

Not too bad right?  Great way to start the morning and not bad on my wallet either.

Now if you know me, you will know I am a creature of habit when it comes to food and don’t mind eating the same thing every day.  My breakfast is the same every morning; oatmeal, a banana, and coffee with soy milk. As routine as this may sound, I plan my meals like this mainly because I want to eat something healthy and filling in the morning. Because I stay so busy, I also appreciate not having to think about what to eat every morning– which saves me lots of time and money.

Get Control

When working with clients on their cash flow, I usually see their food costs as the expenses that can really get out of control.  They save and skimp in other areas but often times dining out is the one place where money falls through the cracks.  A lunch here, a dinner there, drinks here… and there– all of these things really add up. Planning ahead and prepping your meals for the week can ultimately become a more cost efficient route. Think of it as portion control for your finances.

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Iron Lady Chef 

As tempting as it may be to call up your girl friends for a fancy dinner out, a good way to keep your food costs in control is simply by eating at home. I try to go grocery shopping every weekend to stock up for the week ahead.  Yes, there are occasions where I do eat out during the week (i.e. business meetings, client meetings/events or to celebrate a special occasion), but for the most part I usually eat my prepared, planned out meals and it frees up some time and spending cash.  Get a jump on breakfast this week and cook a batch of these. Your tastes buds and your wallet will thank you. 

One Bite At A Time 

Another tip (one I learned from my parents), is to save money by not buying drinks while eating out. Think about it. You’ll end up drinking more water, saving cash, and possibly losing a few pounds by cutting back on sodas. I still follow this same philosophy today.  If you have to have your diet Coke with dinner maybe skip the appetizers and/or dessert. Life without dessert may seem extreme, but deciding ahead of time what to cut will help you stay in control.

Now, I know what you may be thinking.  Going out to eat is part of what you enjoy most and part of your social life too.  I completely understand this. But I’ll let you in on a little secret, I still see my friends, family, attend networking events and go out for social gatherings all the time and usually do all while sticking to my food budget.  Instead of business lunch meetings, I opt for coffee meetings (saves time and money). Instead of always going out to eat with friends, we opt for potlucks at someone’s house.  We love this idea because everyone can bring their favorite signature dish to share, which is usually a great conversation starter and a less expensive route too.

If you just simply enjoy going out to eat and don’t want to give it up– don’t.  Instead, make sure you adjust your spending plan accordingly to ensure you are still in control of your food costs. Remember, financial planning is not about cutting the fun out of your life.  Rather, it is simply planning how you want to use your money to support your current lifestyle, while being able to save for your future one.

For further information I invite you to check out my blog www.Financiallywisewomen.com or email directly at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Brittney Castro is not affiliated with MadeWomenMag.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. California Insurance License #0F33895.

Published in Personal Finance
Wednesday, 15 February 2012 16:11

Day 15: Flower Child vs. Money Minded Mogul

February 15, 2012 

I have a confession to make – I have multiple personalities. No, I haven’t been diagnosed by a mental health physician; I am referring to my multiple money personalities. And I am not alone. We all have multiple money personalities. Due to the complex world we live in, it only makes sense that we have more than one personality when it comes to money. A good balance of several different kinds of money identities is key toward cultivating a well-rounded financial life. 

Two of my main money personalities are the “Flower Child” and the “Money Minded Mogul.” I believe that everyone has these two basic money personalities. The “Flower Child” is the one that wants the thrill of the present and to experience the freedom that money offers today. It is the side that lives in the moment and dreams big goals. The “Money Minded Mogul” is the personality that approaches money methodically. It is the side that plans strategically and takes charge of your financial life, plans out income goals, expense goals and financial goals for the year.    

Most people have more than just these two money personalities, but these two represent a common yin-and-yang relationship many women face regarding how they would ideally like to manage their money versus how they actually manage their funds. What I notice is that a lot of women in their twenties and thirties tend to avoid their inner “Money Minded Mogul.”  I am not sure if it is because we are scared to address our finances or that life gets too busy and prevents us from taking the time to engage in our financial lives. Whatever the roadblocks are, we as women need to make sure we take the time to nurture our Money Minded self.  Women are staying single longer, the divorce rate is still high and we live longer than men – so it’s up to us to learn the ins and outs of personal finance. 


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I’ve learned to acknowledge all my money personalities and use them to their strengths. The “Flower Child” inside us all helps us to dream, imagine, and create; the “Money Minded Mogul” allows us to find ways to accomplish those dreams.  For example, it may be that once you allow your Flower Child time to dream, you realize you want to travel to India and see the Taj Mahal.  Once you capture that dream, you go back to your Money Minded Mogul and analyze how you can make this dream happen.  You decide it will cost $3,000 for the entire trip and you will be able to set aside an additional $200 per month for this goal. Now that you know you can afford to take this trip in 15 months, you can start planning to make your dream a reality. 

Be in charge of your financial life, take time to educate yourself about your finances and plan strategically for your financial goals. 

Here are some ideas to nurture your inner Money Minded Mogul:

  1. Track your income and expenses regularly.
  2. Request your credit score at least once annually.
  3. Map out some short term financial goals and come up with an action plan to help you reach your goals.

Strive to find the balance between your money personalities that is right for you and take time to nurture your (multiple) money personalities.


Brittney Castro is not affiliated with Madewomanmag.com. Brittney A. Castro is a registered representative with and securities offered through LPL Financial, Member FINRA/SIPC. 


This article was part of our series "30 Days of Made: Love Yourself". Each day we released updates of videos, poetry, images, and original content, all based on the theme of loving yourself. Click the link to read more!


Published in Current
Monday, 26 September 2011 10:01

Investing 101 | Baby Steps to Investing

September 26, 2011

You have worked hard to establish a great career--no small feat during an economic recession--and now you are ready to put your money to work for you. But where to begin? Should you hire a financial broker, or become an independent investor? Play it safe with bonds, or play the stock market?  Before you resort to stuffing cash under a mattress, take these five steps toward investing…straight to the bank. 

1. Get Financially Literate. Some investment terms you should know include:

Stock/ Equities - If you own a stock, you own part of the company. A stock is evidenced by a paper certificate.

Securities - Includes stocks, bonds, and bank deposits. 

Bond - A bond is a debt investment in which an investor loans money to a corporate or government entity that borrows the money for a defined period of time at a fixed interest rate. The main categories of bonds are corporate bonds, municipal bonds, and U.S. Treasury bonds.

Market Capitalization - Also known as “market cap.” It is calculated by multiplying the current price per share of a stock with the number of shares outstanding.

Mutual Fund - An investment company that combines the money from a large group of investors to buy stocks and other investments.

Dividends - A portion of a company's profits that is paid out to shareholders on a quarterly or annual basis. 

These are the most commonly used terms in investment and knowing what they mean will help you understand stock roundups in The Wall Street Journal, Yahoo Finance and Dow Jones. When I first tried to calculate a company’s market cap it took me two hours, simply because I didn’t know what it meant. Now that I know the lingo, I can look at an analyst report and easily follow the progress of a stock. I’m no expert, but I know enough to play the game. 

Photobucket  Photobucket  Photobucket

After brushing up on your fiscal vocabulary, read Lois P. Frankel’s Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money.  I love the advice she offers women about diving into investment and not waiting on “Prince Charming” to take care of their finances. Use the workbooks and self-evaluations in the book to establish and monitor your progress toward financial goals. 

Another great read is Douglas R. Andrew’s Millionaire by Thirty: The Quickest Path to Early Financial Independence. Andrew claims that young professionals can achieve financial independence at an early age by investing. He suggests alternatives to the traditional 401k to make the dream of early retirement a reality.

The Richest Man in Babylon uses parables and layman terms to deliver investment basics and emphasize the importance of growing your money. My dad gave it to me when I was only seven and I often revisit the principals outlined in this book. The common sense advice helps keep me in check when I’m tempted to splurge during a sale at H&M.

Also, get in the habit of scanning Investors Business Daily, The Wall Street Journal and Yahoo Finance for the latest news and market trends.

2. Do Your Research. Before you invest in anything, do your homework. Publicly traded companies want your money, so they make it easy to find pertinent information. Check out their websites to find earnings reports, mergers and acquisitions news and stock quotes. Knowing everything you can about a potential investment is crucial to making a wise decision. Supplement your research with facts from Hoover's Company Profiles. This is an invaluable web resource that offers additional material about company management and executive profiles. 

3. Stay Connected. Once you have done your research and decided which companies you want to invest in, it is smart to stay in touch with an online financial community. Social media is a great tool for networking with investment pros and getting the inside scoop on smart buys. Try Stocktwit, a social networking platform where you can “share ideas and learn from passionate investors and traders.”

4. Don’t Invest What You Should be Saving. Investments should be a part of your overall financial strategy; however, it is important to establish good saving habits first. Create an emergency fund, open a retirement savings account and pay off outstanding credit card debt before playing the stock market. Pay yourself first and you should have extra money to invest in no time. 

5. Diversify Your Portfolio. Once you have savings and understand your investment options, it is important not to place all your eggs in one basket. Diversification is the practice of spreading money among different investments to reduce risk. A well balanced portfolio of investments is more likely to withstand fluctuations in the volatile financial market. The U.S. Securities and Exchange Commission offers great advice on steps you can take to diversify your investments for maximum returns. 

Investing is key to financial independence. You want the freedom to travel, buy a home or retire early, but savings alone won’t get you there. The average annual percentage gain for a high-yield savings account is one percent. Compare this to the average 10 percent earned on stocks. When you save, your money doesn’t work for you and you will only have as much money as you set aside from your salary. When you invest, your money grows by earning interest. So, determine your financial goals, study up and take your first steps toward a wealthy future.

Published in Personal Finance