By Matt Kiernan
The CCSU finance association invited Vice President of Finance Industry Regulatory Authority Gerry Walsh to discuss with students her ideas on how to approach saving, investment and avoiding debt.
“The United States hasn’t been a nation of savers,” said Walsh to an audience in Alumni Hall. Walsh says the country uses too many credit cards to pay off their debts and their debts are compounding at enormous rates.
Walsh advises that the best ways to establish a person’s credit score are to apply for department store and gasoline credit cards, take out secured loans, apply for a bank or credit union loan and to ask a friend or relative to co-sign a loan or credit card application.
“What you want to do is make sure you have the greatest, cleanest track record you possibly can,” said Walsh.
A table was shown for measuring a person’s credit score and was divided as payment history holding 35 percent of the total, amounts owed 30 percent, length of credit 15 percent, type of credit 10 percent and new credit 10 percent.
“The higher the score, the lower your interest rates are going to be for when you take out a loan,” said Walsh.
Walsh suggested that students should be looking into retirement to make sure they’re secure in the future. Although it’s difficult to imagine, Walsh says it’s important for students to envision themselves years in the future.
Before students invest, they should create a “spending” plan that includes both saving and investing. Paying off personal loans and credit card debts are also important for students so they can be free to use their money elsewhere.
“Put together a budget that allows you to save, spend and enjoy,” said Walsh.
Investments also work out better when the investor knows about the subject and if they don’t know much about it it’s smarter to not buy into it.
When looking to invest, students must realize the risk tolerance involved and that when they invest in securities, there’s always a risk involved. Stocks carry a high risk while mutual funds have a much smaller risk because of investors pooling their money into a wide range of companies.
It’s also important for investors to invest for the long-term and stick to their plans. The long-term can pay off much greater than the short-term and short-term fluctuations can be dramatic.
FINRA is the largest regulator of securities firms in the U.S. and monitors approximately 664,000 registered securities representatives, 171,000 branch offices and 4,800 brokerage firms. The company fines firms that are caught committing illegal acts and educates investors looking to be involved with the stock exchange among other things.
At finra.org/brokercheck, people can view a broker’s history to see if they’ve had trouble with the law and see if they’re registered with FINRA.
FINRA is going to release in the coming year a financial capability and literacy survey consisting of 2,000 national telephone respondents and 25,000 online survey respondents to determine the average person’s knowledge of financial terms of U.S. citizens.