Leonard J. Hansen

Here's How in Maturity Investing the wrong way and the right way even if late

By Leonard Hansen

Avoid being taken in an investment scam while also investing for retirement even if late at the gate. Here are your questions with answers from the experts. Q. Two regulars on an Internet chat room are urging me to shift my investments to greater returns in stocks they recommend. I need greater income but am leery. What can you recommend? A. You are right to be leery of any investment hyped on the Internet, particularly in a chat room or by unsolicited e-mail. Why should you consider a recommendation from someone you don’t know, with whom you have no position of trust, and particularly one who touts "super returns?" As a mature adult you’re a mark - target sucker - for every possible scam. There are legitimate investment brokerages accessible via the Internet; but there are thousands of scam operations posting fraudulent home pages, pitching lies in chat rooms, and sending hyped newsletters and e-mail. Fraud throughout North America has escalated at a rate faster than anyone can quantify or governments want to recognize. Web-based scams can be in business for under $20,000, according to presentations to the Association of Certified Fraud Examiners. "When the cops get close, the cons close quickly and open elsewhere the next morning." Be wary of every offer or recommendation, particularly if you are addressed as an "insider" when you have done nothing to merit such a position, or promises larger than usual returns. If the offer is too good to be true it is predictably a fraud. Before making any investment on-line, investigators at the U.S. Securities and Exchange Commission recommend that you: "Get financial statements from the company and be able to analyze them; verify claims about new product developments or lucrative contracts; call every supplier or customer of the company and ask if they really do business with the company; and check out the people running the company and find out whether they are reputable and have ever made money for investors before." You’re at risk without this due diligence. Con artists only need a few suckers to make their financial day, while the chance of getting caught for their crime is minimal. Therefore, you must be your own first line of defense so that you’re not taken for a hyped ride to financial disaster. Q. I didn’t start investing when I should have in order to retire comfortably. Must I continue working? A.How much money you will need in retirement involves a number of factors including lifestyle desired, local cost of living, assets and income such as Social Security and/or pension. "Don’t beat yourself up; it is never too late to save and invest for retirement," states John F. Wasik, a financial editor for Consumer’s Digest. "Learn how to cut costs in any of a dozen realistic ways, and invest well the money you save." His book, The Late-Start Investor: The Better-Late-Than-Never Guide to Realizing Your Retirement Dreams, is aptly titled. Wasik’s tips include: If you have a company retirement plan with employer matched contributions, "max it out to save not only your own money but gain the added funds." "If the children have left the nest, switch to a smaller home and invest your savings. You may also pay lower utility bills, property taxes and insurance in addition to reducing debt service." Examine your income tax return. "If you expect a large refund, you’re lending money to the government without interest. Adjust the number of dependents to reduce the tax deduction, receive a very small refund, and invest the newly-found cash." John Wasik’s The Late Start Investor (published by Henry Holt) is a valuable read. Even though you’re more than a day late you may not be a dollar short.