Expert: Gina Boykin - 12/9/2007

Question
As a 23 year old I just graduated and started my first job out of college several months ago. I have about 16k in cash and zero debt.  My employer offers a 401k that i'm eligible to contribute to and will start matchign after I've been employed for a year.  I'd like to start contributing to that but also am considering an IRA, money markets, and open to other investmetns like purchasing rental real estate property once I have a bit more cash.  Anyway, who do i talk to and what are the first steps as far as shopping around for the best options in financial planning?  I know I can accomplish much of this through a bank or financial advisor alike, but where's a good place to start and what are the things to keep an eye out for in evaluating which is the best for me?  Thanks in advance.

Answer
Whether you use a financial advisor or not, you should have some financial education.  Knowledge makes an informed consumer.  You can start by reading a few websites that are designed for beginners, or check a book out of the library that does the same.  I have listed a few suggestions below.

There are two things that I believe are essential to being successful with money - goals/dreams and a plan to achieve them.  In addition to your education, you should start with what you hope to achieve.  Create short and long term goals.  The 401K will help you with retirement, but I'm sure you have some goals for 5 or 10 years.  Don't just invest because it's the right thing to do.  Work toward something that is important to you.

Part of this plan should include a plan for your money right now (a budget), and a long-term plan.  Your priorities (what you do with your money now) and your goals (what you plan for you money later) will be the best evaluator for determining what is best for you.

If you plan to use an advisor, do these things first.  It will mean that you are educated enough to know when someone is trying to steer you into the wrong type of investments (usually those that make the planner more money).  Also, once you sit down with someone, you can stay focused enough to stick to only those ideas that agree with your goals.


As you gain education, you will most likely lean toward one type of investment.  There is no reason to try to do everything - tax liens, real estate, stocks, bonds, foreign currency investing - there are plenty of things to chose from.  Start with one and start small.  You can even start with "play" money, by opening a virtual investment account.

If you want to search for a financial planner, look for a CPA (certified financial planner).  These people are certified by the AICPA.  You can search for one on their website (www.aicpa.org)

Here are those other websites I promised:
www.youngmoney.com
www.fool.com
www.investopedia.com
www.teenanalyst.com

All of the books by Robert Kiyosaki (author of Rich Dad Poor Dad) are also very helpful.  They should all be at your public library.