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How To Be A 'Highly Successful' Investor

TIAA-CREF shares money tips during Financial Fitness Week

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Duke employees visit information tables during Financial Fitness Week. Photo by Leanora Minai.

A secure financial future is a priority to everyone, but with many different ways to achieve that goal, there is no one easy solution. That's why Weihua Xie, an associate in research with Duke's Division of Neurosurgery, was among more than a dozen Duke faculty and staff who attended Monday's Financial Fitness Week workshop, "Five Habits of Highly Successful Investors.""I don't think most people think about retirement soon enough, so hopefully Financial Fitness Week will help people realize how important it is to save," Xie said "With saving for retirement, I always thought it was important to set goals and work toward them." During the workshop, James Ferguson, an associate individual consultant from TIAA-CREF, shared how to set financial goals, realize tax advantages, reduce risk with diversification and understand expenses. The next "Five Habits" workshop is at 10 a.m. Wednesday in Room A of the Searle Center.Here are five tips Ferguson suggested investors follow to maximize investments:1. Set financial goalsEven though retirement can seem far away, it's never too early to create a list of what's important to you. Ferguson said having a list of benchmarks like an ideal retirement age and how much money is needed to be happy in retirement are good places to start.When an investor is preparing his or her portfolio, Ferguson said there are two keys to maximizing investments: Don't only rely on Duke's contribution to a retirement fund and increase contributions over time. "Just because we set a goal doesn't mean we'll absolutely attain it, but it does set the direction we want to go," he said.2. Consider taxes when choosing productsFerguson said investors should review whether their contributions are taken pre- or post-tax from paychecks, whether withdrawals are taxable and what kind of penalties or fees they must pay to maintain their portfolio.3. Diversify your portfolioTo get the most return on investments, Ferguson said that diversifying a portfolio - spreading money across stocks, bonds and more - lessens risk and reduces overall volatility for which investors are at risk. He noted that increasing the amount an employee puts into an account is important to work against inflation, which slowly increases the cost of goods and services over time.4. Allocate assets instead of timing the marketBecause stocks fluctuate in price over time, Ferguson said it's best to diversify investments and to rebalance that distribution periodically. Ultimately, choosing where to invest should be based on personal decisions relating to risk tolerance, investment goals and when you plan to retire.5. Understand the impact of expensesLastly, Ferguson said investors should inquire about whether their investment company charges commissions or other hidden costs. "You should determine if the costs you might have to pay are worth it against the performance you may receive on your investments," Ferguson said. "It's always important to know about your investments, investment companies and what they do with your money."Duke faculty and staff can still sign up for seminars during Financial Fitness Week, which ends Friday.

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