Saving up for a house
I’m saving to buy a house in a few years. How should I invest that money? — P.W., Carmel, Indiana
Not in stocks, unfortunately. The stock market is arguably the best way to grow your wealth over the long run, but in the short run, anything can happen — such as a market crash at an inconvenient time, forcing you to postpone your purchase.
Park short-term savings — money you’ll need within five years (or even10 years, to be more conservative) — in safer places, such as bank accounts, certificates of deposit (CDs) or money market accounts.
What, exactly, are “tech stocks”? — H.G., Santa Fe
When many people hear the term “tech stocks,” they probably imagine companies such as computer hardware manufacturers, semiconductor specialists and software companies. But these days, many, if not most, companies employ a lot of technology in their operations.
Airlines, for example, rely on very technically complex machines and employ fancy software to manage their logistics. Banks may seem like oldfashioned businesses, but there’s a lot of technology behind the scenes as millions of transactions are processed electronically, and consumers are shifting to banking online. Even Nike has recently introduced technology (“Nike Fit”) that measures your foot electronically and recommends the correct shoe size for you — in its stores or via an app. Some companies are even 3D-printing shoes.
The energy industry uses technology to produce solar power and search for oil, among other things. Retailers use technology to track their inventory and remain stocked. Some are even using robots in warehouses. As you can see, “tech stocks” isn’t a particularly distinctive term anymore.
Secure your financial life
Keeping your finances safe means more than not leaving cash lying around. You can save yourself a lot of headaches and hassles, and protect your money, by securing your financial life: Shred any trash-bound documents that have any of your personal information on them, such as your Social Security number, birthdate or account number. Don’t give out your SSN freely — make sure anyone asking for it is legitimate, and truly requires the number. Don’t print your SSN on your checks, and don’t carry your Social Security card or other important papers on you. Ignore all unsolicited calls or emails asking for personal information. Review statements from banks, credit card issuers and other financial companies regularly in order to verify that all transactions are legit. If you get unwanted credit card or insurance offers in the mail, you can opt out by calling 888-567-8688 or visiting OptOutPrescreen.com. Shred the offers you get, so identity thieves can’t use them to apply for cards in your name. Use firewalls, antivirus software and passwords to guard your privacy online. Secure your Wi-Fi network at home, and avoid entering passwords or accessing financial sites over open public Wi-Fi networks, such as those in cafes or airports. When shopping online, stick with trusted, established retailers, and only enter personal information on webpages where the address begins with “https:” (not just “http:”).
Be smart with your passwords. Don’t use the same one at multiple sites, and avoid passwords that are easy to guess — such as your address, pets’ names, children’s names or birthdates. Ideally, use a combination of upper- and lowercase letters, numbers and symbols. Consider using a password manager.
Scammers and thieves are hoping you won’t protect yourself. Foil their plans.
Join in: If you have a question for the fool, visit www.fool.com.