en Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands

My most recent article criticizing the controversial equity-indexed annuity has generated a boatload of email. But one email in particular caught my eye. And it wasn’t from being flamed by irate insurance agents (I got plenty of those!), or emails from thankful consumers, pleased the public is being warned about equity-indexed annuities’ pitfalls.

This special email was from a California lady who had just attended a free dinner promoting equity-indexed annuities. Being a legal assistant, she was able to sift through the fine print found on annuity contracts and to actually understand it. She quickly realized what the salesman presented didn’t line up with the contract. When questioned, he told her that no, what he was saying was true.

After she got home, she contacted the insurance company directly, and they confirmed her suspicions: the salesman was misrepresenting the facts. The fine print was correct, not his sales pitch. In her email to me, she asked a very important question: How can investors protect themselves from being taken by slick salespeople?

First of all, investors have to learn to separate the message from the messenger. Financial salespeople are highly trained to hit consumers’ hot-buttons and overcome their objections. And let’s face it, some of them are pretty good at it! They seem genuine and you want to trust them. But you’ve got to look past the charisma and objectively examine the investment he’s pushing.

Many investors make the mistake of investing with someone purely because they play golf together or attend the same church. Again, focus on the message, not the messenger. Don’t assume expertise just because you know someone.

Second, don’t put your money into an investment that you don’t understand. As Warren Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands

equity-indexed annuities. Being a legal assistant, she was able to sift through the fine print found on annuity contracts and to actually understand it. She quickly realized what the salesman presented didn’t line up with the contract. When questioned, he told her that no, what he was saying was true.

After she got home, she contacted the insurance company directly, and they confirmed her suspicions: the salesman was misrepresenting the facts. The fine print was correct, not his sales pitch. In her email to me, she asked a very important question: How can investors protect themselves from being taken by slick salespeople?

First of all, investors have to learn to separate the message from the messenger. Financial salespeople are highly trained to hit consumers’ hot-buttons and overcome their objections. And let’s face it, some of them are pretty good at it! They seem genuine and you want to trust them. But you’ve got to look past the charisma and objectively examine the investment he’s pushing.

Many investors make the mistake of investing with someone purely because they play golf together or attend the same church. Again, focus on the message, not the messenger. Don’t assume expertise just because you know someone.

Second, don’t put your money into an investment that you don’t understand. As Warren Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands

facts. The fine print was correct, not his sales pitch. In her email to me, she asked a very important question: How can investors protect themselves from being taken by slick salespeople?

First of all, investors have to learn to separate the message from the messenger. Financial salespeople are highly trained to hit consumers’ hot-buttons and overcome their objections. And let’s face it, some of them are pretty good at it! They seem genuine and you want to trust them. But you’ve got to look past the charisma and objectively examine the investment he’s pushing.

Many investors make the mistake of investing with someone purely because they play golf together or attend the same church. Again, focus on the message, not the messenger. Don’t assume expertise just because you know someone.

Second, don’t put your money into an investment that you don’t understand. As Warren Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands

uine and you want to trust them. But you’ve got to look past the charisma and objectively examine the investment he’s pushing.

Many investors make the mistake of investing with someone purely because they play golf together or attend the same church. Again, focus on the message, not the messenger. Don’t assume expertise just because you know someone.

Second, don’t put your money into an investment that you don’t understand. As Warren Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands

en Buffet says, if you can’t explain it to a child in a few sentences you probably shouldn’t buy it. Today’s packaged products sound simple, but pages and pages of fine print often reveal they are very complex. If you can’t read the fine print and fully understand it, don’t buy it.

I can’t tell you how many times I’ve heard investors say, “He said after a few years I could get my money out. But he didn’t tell me I’d have to pay thousands in surrender charges to do it!” When you sign the paperwork for an investment, you are saying that you understand it, are aware of its risks and that you accept them. Moreover, you generally are relieving the advisor of his/her liability in the transaction, regardless of whether the sales pitch was accurate or not.

Third, never give in to pressure to make a decision right away. If an investment is good today, it will be good tomorrow and next month. You should never be forced to hurry a decision to take advantage of a limited-time bonus or some other ‘act now’ offer. These are just tactics to push investors into making a buying decision.

One of the most vulnerable times for investors is when they move money from a company retirement program to an IRA. Most feel pressure to make a decision right away. But even then, you can always park your money in an IRA money market account and take your time to make an informed investment decision.

Fourth, do the research. If you aren’t willing to take a few hours of your time to investigate an investment, you have no business putting your money into it. The Internet makes this easy. Look for negative information about a product. See if the reasons are valid. Make sure you get all the information, not just what the advisor tells you.

Fifth, if you’re planning to put your money into an investment type that’s new to you, move into it slowly. Don’t jump in all at once. You can always add more to that type of investment later.

Last of all, whatever investment choice you make, you won’t know if it’s the right one until further down the road. So make sure you won’t have to pay a big surrender charge if you need to change your mind later.

Don’t be fooled by the hype. If it sounds too good to be