When I left one job to go work for another, I had to wait a certain time until I could enroll into their 401K plan. The company only had 21 employees and one third of them had started within the past year. Since the company was small, it had been using a local financial broker in the city and a representative come down to the office to talk with all of us.

He spoke to each of us to see how he would best invest for our individual needs. I told him that I since I still had over twenty years before I would retire and was thinking of investing more on the aggressive side. On the forms that were in front of us, there were well over a hundred and fifty different ETFs, mutual funds and bonds, but nothing towards individual stocks. He told me his suggestions and at the time I wasn’t has informed as I am now, so I took his advice and agreed.

I received a quarterly report from them about nine months later and noticed that there wasn’t much growth in the portfolio. I ask some of the other employees how they were doing with their investments. Out of the five of us that discussed our investments, none of us were the same age, marriage status, or had the same amount of dependents. The odd thing was that roughly 60% of each of the portfolios were invested in the same funds. We realized that these funds that we were invested in, were high commission earners for the “salesman”. These funds were also the laggers in the portfolios.

I tried to reach the representative who handled my account to get answers, but it was next to impossible to get to speak to him. I spoke to the owner of the company I worked for to see if he could make contact to get some answers, but it never happened.

I left the company about three months later and decided to move my money out shortly after leaving. They informed me that I shouldn’t be looking to take the money out, “I would do better if I’d just leave it in there”. I received my annual statement from the firm and noticed that my account had increased by less 5% overall.

I decided to get my money out and put it in an IRA with one of the online discount broker. They had me jumping through hoops with all the forms and procedures that it took almost two months to finally get transferred. They told me that there would be early withdrawal frees and penalties. At that point I didn’t care, I just wanted it out of their hands. If it wasn’t for the online discount broker going straight after the firm directly on my behalf, who knows how long it would have taken.

After the firm took out its management fees and costs as well as the penalties for removing my money, I had only a 2% gain for the time that I was invested in the plan. The firm was able to take over three percent of the profits for themselves.

When someone else is handling your investments, you need to know what you’re being charged for otherwise you might lose a good portion of you retirement fund to costs. You might think of it as only 1% of your portfolio each year, but consider how much that first year of capitol would be twenty years later, it adds up once you factor in compounded interest on the principal from those earlier years of investing.

Be aware of what you’re paying for, it could mean the difference in when you can retire.

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One individual that has help me to understand and make good choices in the stock market has been Jim Cramer. I’m sure you heard of him and most likely if you’re looking to invest in the stock market, you’ve watched his daily show on CNBC. There’s a lot more to the man and his philosophy than just his one hour show Monday through Friday.

The latest book that he’s written about the stock market is titled “Stay Mad For Life”. The title has is a play on words in regards to his show, Mad Money.

The book starts off with Jim explaining in detail how you need to start preparing for retirement without foregoing the needs of the present. A great message that many of us never received growing up, either by our parents or by school. How many of us were ever taught as teenagers to understand the concept of compounded interest or basic knowledge of personal finance?

He continues by showing us the importance of enrolling into a 401K plan has soon as possible and that the longer you wait, the more money you will miss out on in the long run when it’s time to retire. He writes about how to properly invest and to be actively involved with your retirement fund (he refers to it as retirement capital) and dispels some misconceptions about how certain employment funds can help you.

In the next section he talks about investing for a lifetime, not just investing for your later years. Investing for your retirement and not for the present is something that he goes into detail with and what you can do to make that happen. Explaining the difference between stocks and bonds and how a balance between them will help you.

He writes about the importance of family finances, especially for those with children. The need to teach your children while they are young about money and how it works. Going into specifics about home ownership and getting the right mortgage for your investment.

He also has released twenty new rules of investing. Along with his other rules and his ten commandments, they will give you a clearer picture of what you need to do when investing in the stock market.

Revealing the five bull markets along with twenty stocks for the long term is a section in the book that I found very interesting. I’ve looked back at these stocks and over the long term they’ve have done great and are well-run companies that should continue to do the same in the future.

In his last section he goes into detail about mutual funds. This section is great for those who don’t have large amounts of capital to get started growing their portfolio.

All in all, I found this book to be very informative and I recommend it to anyone wanting to invest in the stock market. I’ll be going into more details about each chapter in later posts but for now I wanted to tell you about a great deal that I took advantage of myself.

After I tried the free trial of Action Alerts Plus investment service, I got so much out of it that I joined for the whole year. Along with my paid subscription, I received Mad Money for free!

First, click the banner below, or the one in our sidebar, to sign up for his 14 day free trial of Jim Cramer’s Action Alert Plus.

After the two weeks are finished, if you sign up for a yearly membership you’ll continue with this great service and get Mad Money for free.

If for some reason, you’d rather just go ahead and buy the book right now, click the banner below. You can purchase it through amazon.com’s secured server. After you read it, tell me what you thought of it.

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