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  Principles & Guidelines for Financial Management  


Investment Management


·                    Keep It Simple.   Investment management should not be overly complex or time-consuming, and financial products should be understandable.


·                    Diversify Investments Appropriately across broad domestic and international asset classes, taking into account your age and personal financial situation.


·                    Keep Management Expenses Low.


·                    Invest in No-load Mutual Funds (indexed funds when possible) and high quality government or corporate bonds or bank certificates of deposit.


·                    Minimize Investment Turnover and minimize taxes.


·                    Document Your Strategy in a written Investment Policy Statement and measure your portfolio’s performance against benchmarks and against your target income.

·                    Exercise Discipline -- maintain your strategic Investment Policy by periodically rebalancing investments across asset classes. Do not attempt to "time the market".



Daily Money Management


·                    Keep It Simple.   Use electronic deposits for recurring income and online bill-paying for expenses,  for example; minimize the number of bank and financial accounts.


·                    Track your expenses by category against a Spending Plan (Budget). 


·                    Know your spending gap.   Do your living expenses exceed your recurring income, and if so, how much must you “drawdown” your investment portfolio each year?


·                    Actively monitor bank transactions and credit reports to avoid fraudulent charges and possible identity theft.


·                    Capture information needed for tax planning and tax preparation during the daily money management and investment management processes.



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