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Home  > Money >  Investing

Keys to the Financial Kingdom
by Marty Orgel

"The only person who can define what financial success looks like for you is you," says Mary Farrell. That is the bottom line of her book Mary Farrell's Beyond the Basics, where she outlines the traits common to people who have achieved their financial goals.

Farrell is a managing director of PaineWebber and a regular guest on television's Wall $treet Week With Louis Rukeyser. During her 28 years of working with the stock market, she has found the following five basic characteristics are common to those who have successfully built wealth.

Plan for wealth
Find well-managed companies.
Constantly re-evaluate holdings.
Diversify holdings.
Do your research.

Farrell is writing for people with a basic knowledge of investing. But what she outlines as the keys to success works for everyone.

Identify your goals: "When it comes to investing," Farrell writes, "there is no one right answer. One size does not fit all." She says you have to determine exactly what you want to accomplish, and then make sure it happens.

Farrell says the successful make clear, detailed outlines of their goals. When planning your dream house, she suggests, write down exactly what you want: three bedrooms, two baths and a yard for the kids to play in. And specify when you want to achieve the goal. This narrows your focus to how much you will need and how long you have to get it.

Develop an investment plan: Calculate your assets and liabilities, income and expenditures, Farrell says. Then develop a coherent campaign unique to you. "It doesn't matter how you do it. What is important is that you do it," she says. The plan should include a strategy for allocating your assets and a realistic estimate of the returns you expect.

Save conscientiously: This is how you get the money to build wealth. During our lifetime, she notes, the demands on our financial resources can prevent us from saving unless putting money aside becomes as much a part of your budget as the mortgage. Farrell suggests you write a check to your own savings account every time you pay bills, and before you write the other checks.

Regularly review and update: The most successful plans change and evolve to accommodate your personal and professional life. You may remarry, sell assets, have children or start to help aging parents. The best investors review and update once a year, more often if circumstances require it.

Continue to learn: Successful investors read business and investing magazines, join investment clubs and scour the Internet, always looking for new information. Her advice for getting the best financial news off the Internet: Stick with brand-name sites.

Once your plan kicks in and your assets grow beyond $100,000, Farrell suggests you consider hiring a financial planner or money manager. You will need one to keep track of the wealth and returns.

Related Stories
• Reflections on Managing Wealth
• The Tortoise Approach to Saving
• Reflections on Managing Wealth

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Related Stories
• Reflections on Managing Wealth
• The Tortoise Approach to Saving
• Reflections on Managing Wealth

Web Links
• The Motley Fool
• CBS MarketWatch
• The Wall Street Journal
• CNNfn

Related Books
• Mary Farrell's Beyond the Basics, Mary Farrell
• The 9 Steps to Financial Freedom, Suze Orman
• Plan Your Estate, Denis Clifford, Cora Jordan

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