There are five things you need to know about your investment accounts. Are you guilty of opening an investment account and then having it go out of sight and out of mind? Many of us start out with good intentions when we open these accounts. But more often than not, we lack the knowledge of what we should do next and don’t seek out a financial advisor’s help.
These are the five things you need to know about your investment accounts.
1. Where your account is held.
You want to know the firm that holds your account(s). This will be where your statements are coming from. Over the lifetime of your account (usually a 401k), it is possible that your firm will sell. It is also possible that your employer may change their mind about who is managing the account. They may switch from a bank to a brokerage or vice versa.
I recommend keeping a physical notebook or binder where you can store important account information. It’s best to then lock it up in a fireproof safe. Be sure to check-in and update the information you have stored on your account.
2. What type of account you have.
You may or may not be surprised how many clients I have worked with who don’t know what type of account they have. If you don’t know, don’t be embarrassed. You’re not alone.
Know the difference between a 401k, IRA, Simple IRA, SEP IRA, Roth IRA… you get the idea. Some accounts come with tax benefits you can use right now. Others have tax benefits once you retire.
You want to know what type of account you have because different accounts have different rules. You’ll want to know the advantages of having one over the other. But don’t confuse your account with your investments. These are two different things.
3. What type of investments you have.
When your money is placed into an investment account, a decision is then made. Sometimes you have to take the initiative to make the investments. Other times, a broker or financial advisor may oversee the account. They can advise you in making investment decisions. For example, in a brokerage account or IRA, you can have, CDs, cash, stocks or bonds.
You want to know the type of investments you have because this dictates how much money you will make over time. It also tells you the level of risk involved. You want investments that are in line with your risk tolerance. And you want them to be in line with the amount of time you have to leave the money invested.
If you have years to invest before needing the money, you will invest differently than needing the money two years from now. This is why you would want a financial advisor to guide you.
4. How much money do you have.
You want to know the balance of your accounts. I recommend that you track your net worth monthly. This is because our financial pictures can get a little complicated. We have a lot of money moving around. If you have more than one checking or savings account, a few credit cards, loans, and an investment account, there’s a lot going on. It can be a little confusing at times.
When one thing goes up, another may be coming down. Your net worth is going to show you the exact picture of your current financial situation. Tracking your balances monthly will allow you to see how your investments are performing. If things aren’t going the way you expect them to, it’s better to make adjustments now rather than later.
5. How much are you contributing.
Whether your accounts are for future goals or retirement, it’s critical to know how much you’re saving. When it comes to a workplace retirement plan, there is usually an employer match or profit share. If you are putting in 10% and your employer is putting in 10%, you’re going to be in great shape. But if you’re putting in 10% and your employer is putting in 1%, you may need to be saving in other ways to make up the difference.
By knowing your contribution, you can project how much money you can expect to have when you’re ready to use it. Even if you’re placing money into a regular brokerage account to buy a second home or a pair of jets, you want to make sure the amount you are saving will match your goals.
If you know these five things about your investments, you’re going to be in far better shape financially. Thinking about investing but don’t know where to start? Read my Investment Basics 101. Feel free to leave a comment below and let me know what you think or any questions you might have.


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