A successful investor maximizes gain and minimizes loss. Here are six basic principles that may help you invest successfully.

Long-Term Compounding
It's the "rolling snowball" effect. Put simply, compounding pays you earnings on your reinvested earnings. The longer you leave your money at work for you, the more exciting the numbers get. For example, imagine an investment of $10,000 at an annual rate of return of 8 percent. In 20 years, assuming no withdrawals, your $10,000 investment would grow to $46,610. In 25 years, it would grow to $68,485, a 47 percent gain over the 20-year figure. After 30 years, your account would total $100,627. (Of course, this is a hypothetical example that does not reflect the performance of any specific investment.)

This simple example also assumes that no taxes are paid along the way, so all money stays invested. That would be the case in a tax-deferred individual retirement account or qualified retirement plan, or even if you just bought and held shares of a stock that paid no dividends. The compounded earnings of deferred tax dollars are the main reason experts recommend fully funding all tax-advantaged retirement accounts and plans available to you.

While you should review your portfolio on a regular basis, the point is that money left alone in an investment offers the potential of a significant return over time. With time on your side, you don't have to go for investment "home runs" in order to be successful.

Ride Out Market Volatility
It sounds simple, doesn't it? But what if you've invested $10,000 in the stock market and the price of the stock drops like a stone one day? On paper, you've lost a bundle, offsetting the value of compounding you're trying to achieve. It's tough to stand pat.

There's no denying it--the financial marketplace can be volatile. Still, it's important to remember two things. First, the longer you stay with a diversified portfolio of investments, the more likely you are to reduce your risk and improve your opportunities for gain.

Second, during any given period of market or economic turmoil, some asset categories and some individual investments historically have been less volatile than others. Bond price swings, for example, have generally been less volatile than stock prices. Although past performance cannot predict future results, you can minimize your risk somewhat by diversifying your holdings among different classes of assets, as well as different individual assets within each class.

Asset Allocation: Spread the Wealth
Asset allocation is the process by which you spread your investment dollars over several categories of assets, usually referred to as asset classes. These classes include stocks, bonds, cash (and equivalents), real estate, precious metals, collectibles, and insurance products.

For many average investors, the focus is almost entirely on stocks, bonds (or mutual funds of stocks and bonds), and cash. You'll therefore also see the term asset classes used to refer to subcategories of these investments, such as aggressive growth stocks, long-term growth stocks, international stocks, government bonds (U.S., state, and local), high-quality corporate bonds, low-quality corporate bonds, and tax-free municipal bonds.

There are two main reasons why asset allocation is important. First, the mix of asset classes you own is a large factor--some say the biggest by far--in determining your overall investment portfolio performance. In other words, the basic decision to divide your money 80 percent in stocks and 20 percent in bonds is probably more important than your subsequent decisions over exactly which companies to invest in, for example.

Second, by dividing your investment dollars among asset classes that do not respond to the same market forces in the same way at the same time, you can minimize the effects of market volatility while maximizing your chances of return in the long term. Ideally, if your investments in one class are performing poorly, you will have assets in another class doing well. The gains in the latter will offset the losses in the former, minimizing the overall effect on your portfolio.

Consider Liquidity in Your Investment Choices
Liquidity refers to how quickly you can convert an investment into cash without loss of principal. Generally speaking, the sooner you'll need your money, the wiser it is to keep it in investments with comparatively less volatile price movements. You want to avoid a situation, for example, where you need to write a tuition check next Tuesday, but the money is tied up in a long-term mutual fund whose price is currently experiencing a loss.

Therefore, your liquidity needs should affect your investment choices. If you'll need the money within the next one to three years, you may want to invest in short-term bonds, certificates of deposit, a money market account, or a savings account. Your rate of return will likely be lower than that possible with more volatile investments such as stocks, but you'll breathe easier knowing that the principal you invested is relatively safe and quickly available, without concern over market conditions on a given day.

Dollar Cost Average for Consistency
Dollar cost averaging is a method of accumulating shares of stock or a mutual fund by purchasing a fixed dollar amount of these securities at regularly scheduled intervals over an extended time. When the price is high, your fixed-dollar investment buys less, but when the prices are low, the same dollar investment will buy more shares. A regular, fixed-dollar investment should result in a lower average price per share than you would get buying a fixed number of shares at each investment interval.

Remember that, just as with any investment strategy, dollar cost averaging can't guarantee you a profit or protect you against a loss if the market is declining. To maximize the potential effects of dollar cost averaging, you should also assess your ability to keep investing even when the market is down.

An alternative to dollar cost averaging would be trying to "time the market," in an effort to predict how the price of the shares will fluctuate in the months ahead so you can make your full investment at the absolute lowest point. However, market timing is generally unprofitable guesswork. The discipline of regular saving is a much more beneficial strategy, and it takes no mental effort or study.

Buy and Hold...Don't Buy and Forget
Unless you plan to rely on luck, your portfolio's long-term success will depend on periodically reviewing it. Maybe your uncle's hot stock tip has frozen over. Maybe economic conditions have changed the prospects for a particular--or a whole class of--investment.

Even if nothing bad at all happens, your investments will appreciate at differing rates, so after a while, your asset allocation mix will change. For example, if you initially decided on an 80 percent to 20 percent mix of stocks to bonds, you might find that the total value of your portfolio has become divided 88 percent to 12 percent. When that's the case, you'll need to rebalance your portfolio.

Rebalancing involves restoring your original asset allocation decisions by shifting your funds among investment classes to restore the ratios you decided on in first designing your portfolio. Many investment advisors recommend using shifts of 5 percent or more as a trigger for rebalancing. Others recommend doing it every year.

College costs
For the 2006/2007 college year, the annual cost of attendance (known as the COA figure) for four-year public colleges is $16,357 and for four-year private colleges, $33,301. The COA figure includes tuition and fees, room and board, books and supplies, transportation, and personal expenses. (Source: The College Board's 2006 Trends in College Pricing Report.)

The trend of annual college costs outpacing inflation is expected to continue. There are many reasons why colleges find it difficult to hold down price increases from year to year. The main factors are continually increasing salary, maintenance, energy, technology, and recruiting costs, along with the goal of providing students with more sophisticated dormitories, dining halls, recreation and health care facilities, career centers, and campus security.

College savings options
It is important for parents to start putting money aside for college as early as possible. But where...and how? There are many possibilities, each with varied features. For example, some options offer tax advantages, some are more costly to establish, some charge management fees, some require parental income to be below a certain level, and some impose penalties if the money is not used for college.

Here is a brief list of options (which a qualified financial adviser can assist you in selecting).

• 529 college savings plans
• Coverdell education savings accounts
• Custodial accounts (UGMA/UTMA)
• Series EE bonds
• Traditional IRAs and Roth IRAs
• Employer-sponsored retirement plans
• Employee stock purchase plans
• Options unique to business owners
  

There are several factors to considering options:

Tax advantages
Money saved for college goes a lot further when it's allowed to accumulate tax free or tax deferred. To come out ahead in the college savings game, it's wise to consider tax-advantaged strategies.

Kiddie tax
Many parents believe they can shift assets to their child in order to avoid high income taxes. This strategy works best if the child is age 18 or older. If the child is under age 18, the kiddie tax rules apply.

Financial aid
Whether or not a child will qualify for financial aid (e.g., loan, grant, scholarship, or work-study) may affect parental savings decisions. The majority of financial aid is need-based, meaning that it's based on a family's ability to pay.

Predicting whether a child will qualify for financial aid many years down the road is an inexact science. Some families with incomes of $100,000 or more may qualify for aid, while those with lesser incomes may not. Income is only one of the factors used to determine financial aid eligibility. Other factors include amount of assets, family size, number of household members in college at the same time, and the existence of any special personal or financial circumstances.

If a child is expected to qualify for financial aid (and most do), parents should be aware of the formula the federal government uses to calculate aid--called the federal methodology--because there can be a financial aid impact on long-term savings decisions. The more money a family is expected to contribute to college costs, the less financial aid a child will be eligible for.

Time frame
Is the child in preschool or a freshman in high school? Obviously, most college savings strategies work best when the child is many years away from college. With a longer time horizon, parents can be more aggressive in their investments and have more years to take advantage of compounding.

When the child is a toddler up until about middle school (sixth grade or so), we typically recommend putting more money into equity investments because historically, over the long term, equities have provided higher returns than other types of investments (though past performance is no guarantee of future results). Then, as the child moves from middle school to high school, it's usually wise for parents to start shifting a portion of their equities toward shorter-term, fixed income investments.

If the time frame is only a few years, parents will be limited in their choice of appropriate strategies. For example, if the child were in high school, equities normally would not be a preferred strategy due to the short-term volatility of these investments. Similarly, parents would not have enough time to build up cash value in a life insurance policy.

Amount of money available to invest
The amount of money parents have to invest at a particular time might affect their savings strategies. For example, if parents have only a small amount of money to invest, trusts probably aren't the best option because they are typically more costly to establish and maintain than other college saving options. In this case, a Coverdell ESA may be more appropriate.
Control issues

Generally, when parents give money or property to their child, they lose control of those assets. Such a loss of parental ownership can take place immediately, as in the case of an outright gift of stock certificates, or it may be delayed, as in the case of a custodial account or trust. In any event, parents must assess their personal feelings about relinquishing control of assets to their child. Some children may not be mature enough to handle such assets, whereas others can be counted on to use them for college costs.

Discussing a college funding plan with your child
As college expenses continue to rise relative to the means of the average family to pay such costs in full, parents may find it helpful to sit down with their older children and discuss ways to pay for college. For example, parents may want to discuss:

• Whether they intend to fund 100 percent of college costs or whether they expect their child to contribute and, if so, in what amount. For example, parents might convey their expectation that their child contribute a certain percentage of all earnings from a part-time job or a portion of all gifts.
• Whether the child will play a role in the savings strategy. For example, parents who want to gift appreciated stock to their child should convey their expectation that the child will apply all of the gains to college costs.
• Whether any money will need to be borrowed, and if so, how much and in whose name the loan(s) will be obtained. The amount that needs to be borrowed may affect the type of college the child applies to (e.g., public or private, top tier or middle tier).
• Whether there will need to be shared financial responsibility during the college years. For example, the child may need to participate in a work-study program or obtain outside work during the college years.

Communicating these expectations ahead of time can prevent unpleasant surprises and help parents and their children better plan for the expenses that lie ahead. Also, an open discussion can give children an increased awareness of the financial burden their parents may be undertaking on their behalf.

Dilemma of saving for college and retirement
For many parents, especially those who started families in their 30s and 40s, the problem of saving for college and retirement at the same time is a nagging reality. At Lightship Mutual, we generally place retirement planning ahead of college planning for the simple fact that parents have no alternative-financing options for their retirement. On the other hand, their children can potentially earn scholarships, grants, and even take out student loans to self-finance their education.

If saving for both goals is a priority to the client, then we emphasize determining specific time frames and liquidity needs for each goal. This process can be daunting for individuals and typically becomes more manageable with the assistance of a financial planner.

Life insurance is an agreement between you (the insured) and an insurer. Under the terms of a life insurance policy, the insurer promises to pay a certain sum to a person you choose (your beneficiary) upon your death, in exchange for your premium payments. Proper life insurance coverage should provide you with peace of mind, since you know that those you care about will be financially protected after you die.

The many uses of life insurance
One of the most common reasons for buying life insurance is to replace the loss of income that would occur in the event of your death. When you die and your paychecks stop, your family may be left with limited resources. Proceeds from a life insurance policy make cash available to support your family almost immediately upon your death. Life insurance is also commonly used to pay any debts that you may leave behind. Life insurance can be used to pay off mortgages, car loans, and credit card debts, leaving other remaining assets intact for your family. Life insurance proceeds can also be used to pay for final expenses and estate taxes. Finally, life insurance can create an estate for your heirs.

How much life insurance do you need?
Your life insurance needs will depend on a number of factors, including whether you're married, the size of your family, the nature of your financial obligations, your career stage, and your goals. For example, when you're young, you may not have a great need for life insurance. However, as you take on more responsibilities and your family grows, your need for life insurance increases.

There are plenty of tools to help you determine how much coverage you should have. Your best resource may be a financial professional. At the most basic level, the amount of life insurance coverage that you need corresponds directly to your answers to these questions:

• What immediate financial expenses (e.g., debt repayment, funeral expenses) would your family
• face upon your death?
• How much of your salary is devoted to current expenses and future needs?
• How long would your dependents need support if you were to die tomorrow?
• How much money would you want to leave for special situations upon your death, such as funding your children's education, gifts to charities, or an inheritance for your children?
• Since your needs will change over time, you'll need to continually re-evaluate your need for coverage.

How much life insurance can you afford?
How do you balance the cost of insurance coverage with the amount of coverage that your family needs? Just as several variables determine the amount of coverage that you need, many factors determine the cost of coverage. The type of policy that you choose, the amount of coverage, your age, and your health all play a part. The amount of coverage you can afford is tied to your current and expected future financial situation, as well. A financial professional or insurance agent can be invaluable in helping you select the right insurance plan.

What's in a life insurance contract?
A life insurance contract is generally composed of:

Legal provisions - conditions, rights, and obligations of the parties to the contract
Policy specifications - the policy you have selected, the amount to be paid upon your death, and the amount of premiums required to keep the policy in effect
Options and riders - additions to the policy that can be purchased in return for an additional premium

Note: The insurer may add an endorsement to the policy at the time of issue to amend a provision of the standard contract.

Types of life insurance policies
The two basic types of life insurance are term life and permanent (cash value) life. Term policies provide life insurance protection for a specific period of time. If you die during the coverage period, your beneficiary receives the policy death benefit. If you live to the end of the term, the policy simply terminates, unless it automatically renews for a new period. Term policies are available for periods of 1 to 30 years or more and may, in some cases, be renewed until you reach age 95. Premium payments may be increasing, as with annually renewable 1-year (period) term, or level (equal) for up to 30-year term periods. Permanent insurance policies provide protection for your entire life, provided you pay the premium to keep the policy in force. Premium payments are greater than necessary to provide the life insurance benefit in the early years of the policy, so that a reserve can be accumulated to make up the shortfall in premiums necessary to provide the insurance in the later years. Should the policyowner discontinue the policy, this reserve, known as the cash value, is returned to the policyowner. Permanent life insurance can be further broken down into the following basic categories:

• Whole life
• Universal life
• Variable life
• Universal variable life

Choosing and changing your beneficiaries
You must name a primary beneficiary (this can be your estate) to receive the proceeds of your insurance policy. Your beneficiary may be a person, corporation, or other legal entity. You may name multiple beneficiaries and specify what percentage of the net death benefit each is to receive.

You can often get insurance coverage from your employer (i.e., through a group life insurance plan offered by your employer) or through an association to which you belong (which may also offer group life insurance). You can also buy insurance through a licensed life insurance agent or broker, or directly from an insurance company.

Remember, quality counts
Any policy that you buy is only as good as the company that issues it, so investigate the company offering you the insurance. Ratings services, such as A. M. Best, Moody's, and Standard & Poor's, evaluate an insurer's financial strength. The company offering you coverage should provide you with this information.

Home Prices are Predicted to Fall
A housing slump is eminent, with the National Association of Realtors predicting the first ever year-over-year median home price decline for existing homes in the nearly 40 years they've been tracking the metric. The debate is now over, and the results are in: Millions of Americans will lose their homes to foreclosure in the next few years...need proof? Just take a look at Yahoo and Google's brand new foreclosure search engines.

Help is on the Way...But is it Enough?
The new Democratic congress is scrambling to get ahead of this looming catastrophe, trying to assemble millions of dollars in funding to assist the at-risk borrowers who will be largely affected by the upcoming crisis. Additionally, the Neighborhood Assistance Corporation of America (NACA)--which many of you know of--is prepared to help up to 10,000 borrowers refinance their delinquent loans. As altruistic as their intentions are, NACA (and I'll even say our Democratic congress) cannot prevent the impending housing bust that will almost certainly devastate the U.S. economy over the next 5 years.

Where Do You Fit In?
If you are a future home buyer, then you will certainly reap the benefits of lower home prices and a wider availability of properties for sale during the coming years. Moreover, you will surely celebrate the day you sign the deed to the largest purchase of your lifetime.

At the same time, do not forget that this current wave of foreclosures will come largely from homeowners who are low-income, minority, and/or first-time buyers. Bankers and mortgage companies have led millions of higher-credit-risk ("sub prime") borrowers into (I) fantasies of unrealistic real estate appreciation projections, (II) inappropriate, high-risk mortgage products, (III) homes that were out of the buyer's price range from the beginning, or (IV) all of the above. Remember that real estate, like the stock market, is a zero sum game. For every buyer, there's a seller...and for every great deal on a purchase, there must also be a great loss on a sale.

What is credit?
When you say you want credit, you are seeking to purchase goods or services today and forego all or a portion of the payment until a later date. You may or may not be bound by a payment plan. You may or may not be required to pay a percentage of the purchase price up front (down payment). You may or may not pay a fee (interest) in exchange for the privilege of buying now and paying later. But in all cases, you are making a purchase and being trusted to make final payment at some time in the future.

Why is credit so important?
Credit provides you with financial flexibility and security.

There are many reasons why you may seek credit. Here are a few examples:

• You move into your first apartment and don't want to sleep on the floor while you are saving up money to buy a bed. You need credit.
• Your blind date orders the lobster, champagne, and a chocolate dessert. You only brought $40 cash. You need credit.
• You are traveling in another country with no access to your bank account and unexpectedly find a painting that will look great in your living room. You need credit.
• You are traveling through Big City, USA, when your car's engine croaks. You didn't anticipate such an emergency. You need credit (if you don't have an emergency fund established).
• You can't live through the summer without a heart-shaped swimming pool just like the one the neighbors got...we'll forget about the fact that a YMCA membership is more cost-effective...If you remain unconvinced by our argument, then you will need credit.

Whether you're unable to make immediate payment, can't get access to your cash, are faced with unexpected circumstances, or simply recognize the time value of money, credit allows you to obtain goods and services today that you will not have to pay for until a later date. Used responsibly, credit can help you improve the quality of your life, overcome financial obstacles, and even (on rare occasions) save you money.

What does it mean to establish credit?
Establishing credit means establishing your reputation as a good credit risk.

When you make a purchase on credit, you are being trusted to make final payment at some time in the future. If you pay as agreed, the lender will likely want to do business with you again. If you don't pay as agreed, the lender will likely be less willing to extend credit in the future or will charge you a higher interest rate. As time goes by, you establish a reputation. If you have paid your bills, it will be said that you are a "good credit risk". This will enable you to obtain more credit from other lenders, in greater amounts.

If, however, you have not paid your bills, or have consistently paid them late, it will be said that you are a "bad credit risk". Lenders and collection agencies will label you as a no-pay, a slow-pay, a deadbeat, sub-prime, or just plain bogus. It will become increasingly difficult (and expensive) to get credit.

Lenders usually rely on credit-reporting agencies to determine your reputation for creditworthiness. These reporting agencies collect data about credit transactions and attempt to keep accurate records on all borrowers in a particular area. There are at least three major providers of such information in the United States. For a fee, and with your permission, a lender can obtain a copy of your credit report and evaluate your reputation for creditworthiness (a limited amount of information can be gathered without your permission).

A typical credit report contains information about you, your address, your job, and your income. Most importantly, it contains a history of your experience with lenders. It typically includes details about who you obtained credit from, how much you borrowed, when you obtained it, when you paid it back, whether you were late, how often you were late, whether there is any outstanding balance, whether any collection actions were taken, and whether or not you filed for bankruptcy.

Convenient, low-cost access to credit is available only if you have established a favorable credit report. Lenders typically ask you to fill out a credit application when you are seeking credit (it is usually in the fine print of this application that you grant permission for them to obtain your credit report). However, information set forth in your credit application is likely to be seriously considered only if it is consistent with information obtained from a credit-reporting agency or verified independently (an inconvenient and time-consuming process).

Without a credit report, lenders have nothing to go on. It is easy for a lender to deny you credit when you have no credit history. Without a record of your credit experience, a potential lender deems you a mystery. The lender knows nothing about you or your reputation for creditworthiness. It may be easier for a lender to deny credit than to take a risk or conduct an independent investigation. If you cannot get a credit application approved, then you won't be able to establish credit.

How do you get credit?
If you want to establish credit, you need a regular source of income. The income can be derived from a job, trust fund dividends, an allowance from your parents, government benefits, alimony, investment dividends, or any other source. What is important is that you have some kind of continuing and predictable cash flow. Without regular income, you cannot demonstrate an ability to make regular payments. Establishing a regular source of income is your first step.

Request credit from a lender who reports to a credit bureau
All your efforts to establish a credit rating will be wasted if your lender does not report repayment information to a recognized credit-reporting agency. Lenders are not required to report. Ask about their policy before you apply for credit. If the lender reports, then ask for a credit application.

Think small at first
By thinking small, you limit the lender's exposure. Exposure is the lender's total potential loss. If you have never obtained credit before, do not make your first request a personal loan for $40,000 with no collateral. This maximizes the lender's exposure. The lender might be willing to extend you credit but not if big money is at stake. Try applying for a small loan, perhaps $500, and pay it off promptly. Then apply for another loan, perhaps a larger one. Eventually, you will have a solid credit relationship with that lender, and the credit activity will be reflected on your credit report.

Choose a credit card with a low credit limit
While thinking small, you may explore the chances of getting a credit card with a low credit limit. Major credit card companies frequently offer small lines of credit to groups such as college students or credit union members. If you are a student, look for applications in the back of campus magazines or in the school's bookstore. Check with your credit union. Your status as a group member may be enough to get you a card. Get it, use it, and pay it off promptly. The activity will be reported to a reporting agency.

Apply for a retail store charge card
If you don't belong to a special group, try the local mall. Many retail stores issue charge cards, which are similar to credit cards, but can only be used at the issuing store. Most major retailers will offer charge cards to first-time borrowers. Ask for an application at the cash register or customer service counter. The interest rates are usually high and credit limits low for first-time borrowers, but if you use the card and pay your bills promptly, you will establish a credit rating. Furthermore, the store may sell your name and address to other retailers, who will mail you invitations to apply for their charge cards.

Obtain a gas card
Most major petroleum companies offer gas cards to first-time credit seekers. These can be used to purchase gas and services at any of the company's stations. The credit limit is low and the balance must be paid in full every month. Ask for a card at your favorite gas station, or check popular magazines devoted to travel, vacation, automobiles, or business for applications and toll-free numbers.

Get the government to guarantee your loan
If you are a full-time college student, you probably qualify for one or more government-guaranteed loans. Most government-guaranteed student loans are available even if you do not have a credit history. Lenders are willing to extend enormous amounts of credit under these plans because the government agrees to repay the loan if you don't.

Get a secured credit card
Many credit issuers offer secured credit cards. A secured credit card provides you with an open line of credit secured by a cash deposit. These types of cards typically come with a high interest rate. Here is how a secured credit card works. You give the credit card issuer a cash deposit. The credit issuer gives you a credit card with a credit limit equal to the cash deposit. You can charge up to the credit limit using the card, and then make monthly payments on the balance. If you fail to make the payments, the credit card issuer uses your cash deposit to cover the unpaid balance. If you make your payments as agreed, you will eventually establish credit and qualify for an unsecured credit card. The secured credit card issuer will return your deposit, less any unpaid balance due, when you cancel the account.

In times of crisis, you don't want to be stranded, shaking coins out of a piggy bank. A financial safety net--often called an "emergency fund"--can ensure your protection if when these crises occur. An emergency fund is a cash reserve, which can be quickly tapped for unexpected events...you know, like a new transmission, a serious medical procedure, or even the loss of a job.

How much is enough?
We suggest that you have three to six months' worth of living expenses in your emergency fund. The actual amount, however, should be based on your particular circumstances. Do you have a mortgage? Do you have short-term and long-term disability protection? Are you paying for your child's orthodontics? Are you making car payments? Other factors you need to consider include your job security, health, and income. The bottom line: Without an emergency fund, you could be financially blindsided by an unexpected event.

Building your cash reserve
If you haven't established an emergency fund, or if the one you have is inadequate, don't panic. You can take many steps to get started:

• Save aggressively: If available, use payroll deduction at work; budget your savings as part of regular household expenses
• Reduce your discretionary spending (e.g., eating out, movies, lottery tickets)
• Use current or liquid assets (those that are cash or are convertible to cash within a year)
• Use earnings from other investments (e.g., CDs, stocks, mutual funds)
• Check out other resources (e.g., do you have a cash value insurance policy that you can borrow from?)

A final note: Your credit line can be a secondary source of funds in a time of crisis. This is often advised for younger clients and students. Be cautioned, however, that this money will of course have to be paid back (often at high interest rates). As a result, we do not recommend lenders as a primary source for your cash reserve.

Where to keep your cash reserve
Jonathan, over at MyMoneyBlog, posted a wonderful analysis of various high-interest, short-term accounts. We strongly suggest reviewing his findings. The key is to make sure that your cash reserve is readily available when you need it, earning the highest rate of interest in the meantime.

Review your cash reserve periodically
Your personal and financial circumstances change often--a baby is born, an aging parent becomes more dependent, or a first home brings increased expenses. Because your cash reserve is the first line of protection against financial devastation, you should review it every six months to make sure that it continues to fit your current needs.

As Lightship Mutual joins the ranks of the online blogosphere, we look forward to providing insightful wit and biting commentary into today's social, political, and technological events as they relate to your personal finances.

Mission: Blog
The Daily Compass represents the ongoing thoughts, musings, and opinions of the advisors of Lightship Mutual. This forum serves to compliment our monthly newsletter, 'The Lightship Compass'. If you are not yet on our email list, click here to begin receiving our monthly publication, as well.

Staying true to our overall company's mission, we believe that this forum belongs to you. We fully anticipate a heavy involvement from our site visitors, and we look forward to providing accurate, clear, fast responses to your questions and comments.

Here Comes the Neighborhood
As the new kids on the blogosphere block, we're happy to be a part of your community. We promise: a well-manicured lawn, no loud music, and we'll only decorate the backside of our house with pink and green shutters. So feel free to drop by anytime with some fruit cake, punch, or any other treats from the welcome wagon. There are always interesting conversations around here, and we are truly excited to be a part of your online experience.