Savings and Groans

Trading the Piggy Bank For an Investment Strategy

Make sure you invest money you can live without for at least three to four years if you want to see it grow, counsels Hamowy. Remember, the more intelligent the risks, the higher the returns. If you're going to be more adventurous with your money, "you have to do some successful soul-searching and convince yourself that fluctuations are okay."

For novice investors, unless "you're particularly savvy and have a lot of knowledge, you should stay away from individual stocks," says Altfest, who teaches and develops the curriculum for investment and financial-planning programs at the New School. "If your stomach can't handle it, don't do it," adds Hamowy. Investing in individual stocks requires a lot of research, money, and nerves. Success is difficult to achieve. "I don't want you to lose half your money overnight by investing in stocks if it's money you can't afford to lose," Hamowy insists.

But not everyone agrees. "If you're going to invest, I don't know why you don't try to beat the stock market instead of trying to mimic it," says Staton. "The key to making money is putting most of your money into shares of companies that are consistent." His plan is to invest in businesses that have withstood the test of time, like Coca-Cola, DuPont, and Exxon.

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Whatever you decide, "Don't be tempted by locker-room talk," says Altfest. "Just because one person says something is a good investment, it may not necessarily be good for you."

Through the Internet you can access a lot of information on how to manage your dough. Make sure you know what you're doing if you're tempted to do your buying and selling online. "For the right kind of person—the disciplined investor who does his homework—Internet investing is a boon," writes Tobias. It may not be for everyone. For example, Platzman says she needs the reassurance of the human element. She's wary that some technical foul-up will distort her information. ("If there was actually a person at the other end then I would do it," she says.) And some may want to think twice before logging on for other reasons. It can "become just one more way to addiction," says Tobias.

If you're still not sure what to do with the wad of cash that's left a white outline on your jeans pocket, at least become aware that the only way to fight inflation and make your money work for you is by investing it. If all this financial talk still turns you off, take a tip about under standing your finances from Patricia Verdote, a physical trainer, who's thinking about investing in a second mutual fund. "As long as the arrows are pointing up, you're okay."

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