"InvestSmart Montana is designed to help Montanans become more informed investors. All investments involve risk, but information can help avaoid the unnecessay risk of fraud. It won't prevent every case of fraud, but knowledge is an investor's best defense. "

State Auditor, John Morrison

1. Make a financial plan--what are the things you want to save for?

Know your current financial status--what you own vs. what you owe.You are making a net worth statement with your liabilities.

Keep track of your income and expenses for every month.

Figure how much you will need for such basic needs as shelter, food, clothing, healthcare and transportation. Don't forget to factor in optional expenses such as entertainment and vacations. Then calculate how much you can comfortably afford to save on a monthly basis for emergencies and future expenses.

2. Based on your financial plan and positive net worth, determine the amount you can invest.

Do not invest money that you will need in one or two years unless the investment matures in one or two years.

3. Determine what your investment objectives are: income, growth or a mix.

4. Find a broker that fits your needs and comfort level. You can check out your broker by calling the State Auditor's Office or at nasdr.com.

A discount brokerage charges lower fees and commissions for its services than what you'd pay at a full-service brokerage. But generally have to research and choose investments by yourself.

A full-service brokerage generally costs more, but the higher fees and commissions pay for a broker‘s investment advice based on the firm‘s research.

An investment advisor usually charges a percentage of your portfolio to manage your entire account.

Get references. Ask friends, relatives, and co-workers for the names of the brokers or investment advisors who have served them well.

Conduct interviews with at least two brokers or investment advisors, ask for customer references and follow-up.

Ask about fees and commissions; fully understand these costs before opening an account.

5. Contribute regularly and increase your contributions proportionately as your income rises from pay increases and promotions. Where possible, contribute to your employer-sponsored retirement plan via payroll reduction, which not only automatically invests a pre-set amount in your account, but also helps to reduce current income taxes.

6. Stay focused on your long-term goals, even as your life changes. Don't be lured off course by changes in the financial markets or by short-term frills and extravagant purchases.

7. For more information, go to sao.mt.gov and check out the State Auditor's website.

Contact the Montana Securities Department at 1-800-322-6148, or U.S. Securities and Exhange Commision www.sec.gov, or the North American Securities Administration Association at www.nasaa.org, or the National Association of Securities Dealers Regulation [NASDR] at 1-800-289-9999