How to Effectively Invest Your Money in 2014

Countless people ask for advice from friends, co-workers, family members, strangers and their financial planners about what they should do with their investments or retirement plan.  Many people panic or spend all or a large portion of their retirement money or moved their retirement money to a savings account, CD or hid it under their mattress when an economic crisis occurs. This is least effective decision. 

Don’t get caught up in the hype - investing in the latest tip, follow a friend or family member’s advice without doing research first. Follow the rule of 72 – your money doubles every 7 years, it is not the timing of the market, it’s the time in the market.  Keep your money invested for the long haul. Don’t take money out based on economic changes.

Every investor has different financial goals and objectives and should work with a financial planner to assist you with meeting your goals.  Financial planners have expertise in how to survive the ups and downs of the stock market and can provide the best advice and if and when you should move your money.  Here are 21 tips to help you invest your money effectively in 2014.

When to invest

1. As soon as you start working or as early as elementary school.  If your company does not offer a retirement plan open your own IRA.  You will need at least 30 years of investing (depending on your salary) to have enough money for retirement.
2. If you plan on getting married
3. If you plan on having children
4. If you are part of the 99%

How to Invest

1. Employer. Sign up for your employer's retirement plan and take advantage of matching contributions. You will need at least 70% of your income during retirement so contribute as much as you can each year.
2. IRA. Setup a separate IRA using automatic paycheck deduction to help reduce taxes.
3. Brokerage. Invest with an established investment company or brokerage company such as Charles Schwab or Price Waterhouse Coopers.
4. Mutual Funds. Invest in mutual funds.
5. Stocks. Purchase stocks that offer dividend reinvestment. Also purchase stock in companies you do business with or purchase products from. If you shop at Target frequently purchase a share of Target stock.
6. Businesses. If you have some extra money you can invest in companies that never go out of business: grocery stores, gas stations, car repair shops, pharmaceutical companies, information technology companies.
7. Diversify. Diversify your portfolio to minimize losses.  Put a portion of your money in stocks/mutual funds, a portion in low risk investments such as bonds and a portion in medium risk investments such as large cap funds.

Where to invest

1. Mutual funds
2. Individual stocks
3. Bonds
4. ROTH IRA
5. DRIPS (Dividend reinvestment plan)
6. Options
7. Futures
8. Real estate
9. Precious metals
10. Art