Win Big at the Game of Life Investments

Investing is a lifelong process, and the sooner youstart, the better off you are. The first part of theprocess is developing consistent saving habits.Whether you're saving for retirement, a newhome, or that once-in-a-lifetime vacation, you'll needa dedicated focus on saving. Regular contributions tosavings or investment accounts are often the mostproductive; if you can automate your deposits, savingbecomes a little easier.

Timely Decisions

Once you begin saving on a regular basis, you'llneed to start making decisions about how to investyour money. Regardless of which financial stage of lifeyou're in, you'll need to consider a few major details,including what your investment objectives are, howlong you have to pursue each objective, and how comfortableyou are with risk.

The answers to these questions will help you determinewhether to put your savings into investments thatproduce income or ones that concentrate on growth. Forexample, a retirement fund doesn't need to produceincome until you retire. Therefore, your investmentstrategy should primarily focus on growth until you areclose to retirement age. After you retire, then it's time todraw income from your investments.

Appropriate Risks

All investing involves a certain amount of risk. Indetermining the amount of risk your investments shouldcarry, weigh your ability to tolerate price fluctuationsagainst your need to earn a rate of return. Keep in mindthat time plays an important role in this decision. Forexample, if your retirement is 30 years away, you canprobably tolerate more risk since you have time to makeup any losses you experience early on. If you're saving tobuy a house, however, you probably want to take on lessrisky investment options.

But what about less predictable investing scenarios?For instance, let's say you're expecting your first child atage 40. You'll need to decide how to balance yourfinances to account for the additional expenses of achild. Perhaps you'll need to supplement your incomewith income producing investments. In addition, yourchild will be entering college at about the same timeyou're entering retirement. Therefore, your growth andincome needs will most certainly change, as well as yourlevel of risk tolerance.

Stages of Investing

One of the things investors share in common ismajor life events, such as first jobs, first homes, and firstbabies. Following is a list of some of life's major eventsand the investment decisions that should be consideredwhen you're facing such change:

•When you get your first real job. Start a savingsaccount and a retirement fund; make regular monthlycontributions to both no matter how small they may be.

•When you get married. Determine your new investmentcontributions and allocations, taking into accountyour combined income and expenses.

•When you want to buy your first home. Invest someof your nonretirement savings in a short-term investmentfor down payment, closing, and moving costs.

•When you have a baby. Increase your cash reservesand life insurance, starting a college fund right away.

•When your children move out. Boost your retirementsavings contributions.

•When you reach age 55. Review your retirementaccount's asset allocations to accommodate the timeframe for your investments; continue saving.

•When you finally retire. Review your potentialcombined retirement income and reallocate your investmentsto provide the income you need while still providingfor some growth in capital to help beat inflation andfund your later years.

One of the hardest things about investing is discipliningyourself to save an appropriate portion of yourincome regularly so that you can meet your investmentgoals. Establishing a relationship with a financial advisorcan go a long way. Your advisor can help you practicesmart financial management over your entire lifetime.

Scott J. Kleiman

is the president of Apollonia

Financial Services in Elkins Park, Pa. All securities

offered through Linsco/Private Ledger, member

SIPC. Past performance is no guarantee of future

results. The information presented is the opinion

of the author and not Linsco/Private Ledger. Mr.

Kleiman welcomes questions or comments at 800-242-1760 or info@apolloniafs.com. This article is not intended to provide

specific advice or recommendations for any individual. Consult

with your financial advisor if you have questions.