8 ways to change your financial life: these basic but powerful strategies can boost your net worth

Black Enterprise, June, 2004 by James A. Anderson

For Joyce Hurley, 53, applying this strategy meant establishing financial priorities. A paralegal in Los Angeles, Hurley looks to have $130,000 set aside by the time her son, Jonathan, heads off to college in seven years. With her eye also on retirement, Hurley has developed a somewhat aggressive portfolio, with a sizeable weighting in stocks. "I sat down with my financial planner and set that as a goal with some urgency," she explains.

8 trust a professional to do the heavy lifting

The myriad responsibilities and concerns of day-to-day living make keeping an eye on investments a tricky matter. Hiring a financial planner is the best way to manage it all. In most cases, individuals don't have the time to do it themselves. "There's no better way to stay on top of matters," says Percy Bolton. "That way you can turn your attention to more pressing issues." And ultimately secure your financial future.

RELATED ARTICLE: Protect what you invest.

When it comes to safeguarding what you've invested--the strategy financial professionals have dubbed "capital preservation"--keep one thing in mind: Guarantees of getting your money back come at a price. In some cases, getting your principal back in full will clip your expected return; in others, your sacrifice will be the quick-and-easy access to your money.

Given these facts, you may need to readjust expectations. If you opt for a liquid, easy-to-cash-in solution such as a money market mutual fund, you can expect a low rate of interest in return--less than 1% according to iMoneyNet, a Website that tracks the market. Reach for more income or yield and a safe principal, and you will have to tie your money up for some time. In the case of a 10-year U.S. Treasury bond, 4% interest per annum requires a decade-long commitment.

Financial planner Percy Bolton says the more time you have, or the less critical your goal, the more risk you can afford to take on. If you're interested in investing in stocks, you might opt for companies paying dividends. Dividends produce regular income because companies that can afford to pay dividends typically have steadier profits. The price of their shares, meanwhile, tends to fluctuate less on the open market.

An even less volatile choice might be a large-cap value equity mutual fund, the type of fund with a large spread of stocks, many of which will pay shareholders--like your fund--dividends. A bond mutual fund is another option, but beware. Unlike bonds, bond funds do not promise you your entire principal and have no set return over time. Also, bond funds will slide up and down in value with interest rules. With many experts predicting a rise in rates, sapping bond values, the current environment might make bond funds a bit tricky over the next year or two.