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Investing 101
Become a smart and empowered investor
Get started building wealth by reviewing these investment topics, understanding the risks, and being vigilant of scams and fraud.
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Start with Clear Investment Goals
There are many financial goals (some of which can overlap) that you can achieve. Here’s a short list of the most popular
and important financial goals that you can strive for when starting your investment journey.
Generational wealth building
Looking to pass down assets to the next generation? That’s building generational wealth and it’s usually passed down in the form of cash, investments, properties, etc.
Income generation
Your primary income is earned through your main career or job. If you want to generate additional income, this can be earned through a side business, royalties, investment, dividends, etc. Be sure to measure the risk of whether you can afford the time, money, or effort these actions require.
Financial security, independence, and freedom
Financial security means having the savings and diversified investments to weather through emergencies or financial hardships.
Financial independence means being able to live comfortably without working because of your savings, passive income, and other investments.
Financial freedom means having such a strong financial foundation that you no longer have to worry about the cost of goods or services.
Financial portfolio diversification
This goal is for people who want to reduce their financial portfolio’s volatility. It may help increase returns and reduce risks, depending on market volatility. Always talk to a licensed financial planner or investment advisor first about diversification strategies.
Retirement planning
When you retire, if you want to have supplemental income to your monthly Social Security income, advanced planning is incredibly important. Common retirement planning includes participating in a 401(k), 403(b), or 457(b) through your workplace. However, if you’re a Californian without access to these plans, you can open a retirement savings account with a financial institution or via CalSavers.
Education funding
If your goal is to save for your child’s future education or vocational training, there are a variety of college savings plans to choose from, known as 529 plans and many are even tax-free. For more information, check out ScholarShare 529, California’s 529 savings program.
Understand Important Investment
Terms and Regulations
Whether you’re new to investing or have an established portfolio, there’s always room to know
more. Learn about the fundamentals and get help if you suspect illegal practices.
Buying and Selling
The strategy and activity of buying an investment at a low cost and selling it when its value increases.
Laws
Investor protection laws in place in the United States designed to protect investors from fraud and abuse.
Market Volatility
The rise and fall of market prices and investments which is related to investing risks.
Explore the Different Investment Products
Every investment product is different and has its pros and cons. Get the details to help decide which investment product is right for your wealth-building goals. Learn more about how they can bring investor education to your community.
Do Your Own Research
By understanding what you’re putting your money into,
you can make informed decisions and avoid unnecessary risks.
Know the Taxes Associated with Investing
Find out how taxes may affect your investments, wealth, financial planning, and goals.
Strengthen Your Knowledge About Financial Service Providers and Fees
Learn the costs of certain investments and where you can turn for guidance.
Learn About Investment Fraud, Scams, and Risks
Protect yourself from some of the most common investment scams and fraud. Learn about the other risks associated with investing.
Three Tips for Choosing an Investment Advisor
Use these tips to help you find the right investment advisor for your investment goals.
1
Know your goals
If you know your investment goals, then you can better narrow down the type of investment or financial advisor that’s right for you. Spend some time thinking about your goals and research related topics to help start making a game plan.
2
Talk to multiple advisors
Don’t hire the first person you speak to! It’s best to get a feel for the plans different advisors would make for you and how those plans will work with your finances and goals.
Watch & Learn
Tune in for the latest videos, webinars and workshops.
Do Your Own Research – Start With DFPI
Protect your money. Know your rights. Do your own research.
At the DFPI, we believe the more information you have, the more empowered you can be. We work hard to provide Californians with financial education, fraud and scam alerts, resources, and tools to help them make smart financial choices.
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Funded by a grant from the Investor Protection Trust.