The Commission and Investor Education

The enforcement cases typically highlighted in this space tend to focus on what went wrong with a transaction, not how to invest. In contrast, the Commission does have an Office of Investor Education that focuses on the role of investing to help build a financial future. That Office has been highlighted this month since April has been designated as National Financial Literacy Month.

The Investor Education Office is, in some senses, the positive side of the agency, focusing on educating the public about the efforts of the Commission to aid investors to properly invest their money to hopefully build a positive future. A good example of the work done by this Office is the Ten Building Blocks to Building Wealth, published by the agency and its Director, Lori Schock. Those principles are part of a larger program to educate investors on the way to properly invest their funds to build a solid future. Those principles can be summarized as follows:

Start early: The point is to begin as soon as possible to create savings and a plan that fits your goals for the future;

Use free tools: At Investor.gov the Office publishes materials to help investors start and continue to invest properly without charge;

Create a savings/investing plan: There are an abundance of resources available at little to no cost to help get a start and continue building a financial future. While Investor.gov is a great source of information, it is only one of several.

Pay off high interest debts: A key part of the plan is to eliminate high interest debt to the extent possible and focus on sources of capital other than items such as high interest loans.

Investigate the background of professions: It is essential to inquire about the background of any professionals assisting with the development of the plan. Stated differently, any advice offered should be investigated prior to acceptance.

Research: All investments should be investigated before committing funds. Unsolicited advice should be carefully evaluated before being accepted.

Invest regularly: It is essential to invest regularly using a long-term plan. This helps build wealth.

Retirement plans: Invest in a retirement plan sponsored by your employer and take advantage of any matching funds offered. You can also use other opportunities.

Scams: It is essential to avoid scams and unsolicited advice. Investor alerts from the Commission and similar sources can aid in this endeavor.

FOMO: Finally, it is essential to select proper investments. This typically translates to skipping FOMO or “fear of missing out.” It is not necessary to invest in the latest trend. Rather, the key is good, solid investments.

Adherence to the Commission’s building blocks as listed above can aid building a long term and profitable plan. The Commission’s presentation of these points should be carefully reviewed. They are available here.