recent investment vehicle—similar
to a mutual fund—that tracks the
performance of a market sector and
is traded like a stock. They are typi-
cally low-cost investments offering
relatively easy diversification. But
you shouldn’t put money into even a
simple investment that you don’t un-
derstand. “If someone is pitching you
an investment that sounds good on
the surface—say, it pays you 6 percent
a year—ask how it works,” says
Maurer. “If you open up the cover,
what are you going to see?”
This is true for other products,
too. Shopping for a new treadmill,
I listened as a salesman tried to
persuade me to pay $800 for features
I wasn’t sure I’d ever use. A personal
trainer had more impartial advice:
Lace up my running shoes and do a
trial run in that showroom. I did—
and bought a cheaper machine.
Banking online
makes you
smarter and safer
Yes, it saves time
(nearly two hours a
month, according to
Javelin Strategy & Re-
search) and money (about $60 a year
in stamps if you pay 12 bills a month).
But banking online also makes you
smarter, because it puts you in control:
You don’t need to drive to the bank
or pick up the phone for info on your
accounts. “Or stand by your mailbox
and wait,” says Mark Schwanhausser,
senior analyst with Javelin. “That’s
not control. That’s being passive.”
Web banking lets you monitor your
spending, tweak your budget, sched-
ule payments, and more, particularly
if you marry your online bank with the
personal-finance management tools
available online. (For more on online
money tools, see “Does Your Plan Add
Up?” on page 29.)
Jean Chatzky is the financial editor for
NBC’s
Today
. With additional reporting
by Arielle O’Shea.
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