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Sonja Haggert

MY HUSBAND AND I have been investors for a long time. For us, it’s an interesting hobby and we’ve learned a lot along the way, plus we’ve made some money.

Friends and family sometimes ask what we’re doing and whether we can help them. Neither of us has any sort of certification as a financial advisor or any sort of formal training in investments. We can just imagine what a wrong suggestion would do to a friendship or family relationship.

Instead, we share our thoughts and philosophy in general terms, and shy away from naming specific investments. Here are five points we make:

1. Get a financial education. Read The Wall Street Journal. It’s the gold standard for financial information and highly readable. Check out CNBC’s Mad Money for its interviews with corporate executives, and also Squawk Box, which tends to be more issue-oriented, with big name guests such as Alan Greenspan and Bill Gates.

YouTube has a variety of options, including a popular channel for Millennials called The Financial Diet. The choices in books are vast. We enjoyed The Gone Fishin’ Portfolio by Alexander Green, which encourages diversification with a selection of mutual funds and exchange-traded funds (ETFs). If you’re like us and interested in dividend stocks, you might also enjoy Marc Lichtenfeld’s Get Rich with Dividends.

The investing forums on Reddit and Quora are great for asking questions. We constantly refer to Seeking Alpha and Atom Finance for general market information, and head to Yahoo Finance and Fidelity Investments for information on specific investments. Vanguard Group has a wonderful tool that lets you compare mutual funds and ETFs, even those not managed by Vanguard. For dividend investors, is an excellent resource, while is good for information on dividend increases and decreases.

2. Think hard about your goals. It really pays to have some basic understanding of where you want to go on your financial journey and how gentle you want the ride to be, because your time horizon and risk tolerance will have a big influence on how you invest. While retirement is the ultimate goal, perhaps you have interim goals such as a college education for a child or a second home.

3. Diversify broadly. You should probably have the bulk of your money in mutual funds or ETFs, which are a simple way to get exposure to hundreds or even thousands of different securities. My husband and I favor ETFs. Why? Mutual funds will, in almost all cases, have higher fees, plus they tend to generate bigger tax bills.

4. Hire a financial advisor. I realize that not everybody needs a financial advisor. But even though we feel we’re reasonably knowledgeable about investments, my husband and I have an advisor. He’s a good sounding board, and he helps us stick to our financial plan and revise it when necessary.

How do you find an advisor you can trust? Get recommendations from your tax advisor, attorney or other professionals with whom you have dealings. You might also ask friends. Make sure potential advisors have meaningful credentials, such as the Certified Financial Planner or Chartered Financial Analyst designation. You can check out an advisor’s credentials at Then interview your choices. Some questions you might ask:

  • How will I pay for your advice? Do you charge a percent of assets or an hourly fee, or are you on commission? How much can I expect to pay each year?
  • What types of investments are you licensed to sell?
  • How often will you communicate with me? You should expect to talk to your advisor—either in person or on the phone—at least every six months.
  • Ask potential advisors to explain a concept with which you’re familiar. See if the explanation is clear or condescending. You want to deal with someone who speaks your language, not jargon.
  • Ask potential advisors about the last financial mistake they made and how they handled it.

Make sure the advisor you pick is someone you feel comfortable with and who understands your goals. If it just doesn’t feel right, or if the advisor speaks only to you and not to your partner, look elsewhere.

5. For my husband and me, the fun part of investing is following companies that interest us. For instance, you might keep tabs on Apple because you like its iPhone or Teladoc because you’re a doctor. Just don’t imagine that because, say, you’re a software engineer or a physician that you have some special insight. Indeed, if you decide to buy individual stocks, don’t invest in a company just because you work in the same industry, or you got a tip from a friend, or you heard someone rave about the stock on TV.

Instead, get help from your financial advisor or from a financial newsletter. To find a newsletter that resonates with you, ask for sample copies. We subscribe to one that matches our philosophy. The biggest benefit is that the newsletter does the financial analysis for us. So what’s our philosophy? We like dividend-paying stocks, especially those that have a history of regularly raising their dividend. Reinvesting those dividends can be a great way to benefit from investment compounding.

Sonja Haggert’s previous articles were Right TurnGetting Used and Check’s in the Mail. She’s the author of Invest, Reinvest, Rest. You can learn more at Follow her on Twitter @SonjaHaggert.

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