Let's face it: A financial planner can offer sound guidance when it comes to managing your money, but no one cares more about your accounts than you do. Ultimately, it's up to you to decide what's best for your financial future. Don't worry, the savviest money strategies aren't terribly complex. Here are five simple rules financial experts live by—and you should, too:

1. Don't even think about investing heavily in the markets if you're carrying a balance on a credit card.

The interest you owe is a guaranteed negative return—you will lose that money. Consider this: The typical credit card interest rate is around 15 percent, but a diversified portfolio might earn an average annualized return of just 6 percent. (The safest investment, a ten-year Treasury note backed by the U.S. government, currently yields around 2 percent or less.) If your employer offers a matching contribution to your 401(k), though, set aside enough money to qualify for the maximum match, but use any additional funds to pay off your credit card balances.

2. There's no reason to invest in mutual funds that charge commissions and high fees.

Some financial planners advise their clients to purchase funds that charge an initial sales commission or load, even though plenty of options don't. What's more, they may also steer clients to mutual funds that have annual fees topping 1 percent of the fund's value when other, lower-cost options might charge one-fifth that amount or less. These high-cost alternatives serve just one purpose: to compensate your planner. If you want to work with a professional adviser, choose someone who favors low-cost funds and charges a flat fee that isn't tied to a specific investment.

3. No one has a clue what the stock market will do this year—and that's okay.

Even the most experienced financial advisers know it's a fool's game to make big investment decisions based on what might happen in a few months. Don't worry if the market goes up or down. Focus on building a diversified portfolio with a mix of stocks and bonds that will grow in value over the long term. Think decades, not quarters.

4. It's all about how much you save.

A financial planner can help you figure out an allocation strategy—the mix of stocks, bonds and cash that make up your 401(k) or IRA—to fit your goals. That said, how much money you set aside is more important than how you invest it. You need to be putting away at least 10 to 15 percent of your salary every year (around 25 percent if you started saving in your 30s or 40s); income from your savings plus your Social Security payments should replace about 70 to 80 percent of your pre-retirement paycheck. If you get a raise, plan to invest half of it.

5. As long as you aren't retiring in the next ten years, a stock market decline is good news.

If a jacket you'd had your eye on was suddenly discounted 25 percent, wouldn't you be thrilled? You should feel the same way about stocks. When the price of an investment drops, your dollar buys more shares—and more shares will earn more money when the markets inevitably go back up. Since 1926, the worst return over a ten-year period for a portfolio consisting of 70 percent stocks and 30 percent bonds was 1.74 percent—that's still a positive outcome. Automate contributions to your 401(k) or IRA so you can continue to invest on a regular schedule regardless of what's happening in the markets.

Suze Orman's latest book is The Money Class: How to Stand in Your Truth and Create the Future You Deserve. To ask Suze a question, go to Oprah.com/omagazine_talk.
Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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