One of the most important skills in life is understanding your money, and the correct ways to make it grow. Of all the language, math, and science skills schools teach to help you get a paying job, they never teach you how to take care of the money you make. Of course, having a well paying job is the first step to survival and paying expenses. Keeping as much of that money you make savings is also really important. This includes careful spending and taking advantage of sales and coupons.

But then what? If you ask most retirees they'll tell you it is scary once that paycheck stops and all you have to depend on is those life savings. Especially for this current working class generation, from whose retirement funds the government is "borrowing" from to pay for our debt, we have no dependable social security for retirement. The theoretical solution, which everyone knows, is investing so your savings grow over time as the investment grows, and that investment growth covers your retirement living expenses.

It's safe to say at some point, your savings will be tied to the stock market. Could be through pension funds, 401k's, IRA retirement funds, life insurance, etc. What's critical for you to know is whether you, your current financial advisor, or another financial advisor is the one to trust your hard earned money with.

The standard pitch a financial advisor will give you is that the stock market goes up in the long run. By the time you retire in a 20 or 30 years your investments will be worth more than when you started right? While the statistic is true over 50 or 100 years, there are decades in between where the stock market is the same or lower than when you started. What happens if your retirement date happens to be during those bad years? Even if you retired at a time when the stock market is the same as when you started instead of down, it still means your savings did nothing over the decades to help you retire. More devastating would be realizing that years of saving with coupons, sales, and driving cars with higher MPG did little to help compared to how your investments lost.

Know that investing on your own is a challenge, but it is very doable and many regular working class people successfully do it everyday to increase their savings and wealth. However, looking at our self assessment criteria below, if you are still in the "Beginner" stage, it is safer to find a good professional to manage your money for you. The danger is most financial advisors aren't professional money managers, they're just advisors who work mostly as salesmen for investing firms.

A simple way to see if your financial advisor is qualified to handle our savings is to ask them to see records of real customers they themselves have personally managed. Look at those records and see if those customers were able to retire comfortably like the financial advisor is promising you. This probably means the financial advisor would have dozens of years of experience and investing his own money along side yours.

Another way to access the qualifications of your financial advisor, yourself, or any other person to manage your money is comparing against criteria we have set:

Level 1: Beginner Beginners have little to no knowledge about the stock market or finance. Most general public investors fall in this level. Beginners can't consistently make money week in, week out. Month in, month out, Year in year out. If you make a lot sometimes, but also lose a lot, you end up around where you started. That does not help growing your investments. You can see why we say many financial advisors and mutual funds are not qualified to handle your investments. Beginners must be able to do own research and make own judgments without relying on someone else's opinions and reports. Limited knowledge of basics of fundamental analysis, technical analysis, and financial market mechanics. Everyone's goal should be to pass as a "Beginner", like getting a driver's license.

Level 2: Sophomore Consistently make money with a basic strategy, but not good enough to make a full living. Sophomores can consistently make 1% or 20% a year, but it's not enough to make a living. However, the consistency is key because it means dependability through proper understanding of investing. With a consistent foundation, sophomores can then improve their strategies, techniques, and even the assets they trade in order to increase their investment returns. Assets like options, futures, and forex have potential for bigger returns, but are also much more dangerous than stocks if you are not consistent yet.

Level 3: Advanced (Solo) Consistent returns, can make a living trading (i.e. has a bread & butter strategy). That means consistently making at least 30% or more returns per year. Very few people fall into this category. Even many professional money managers and millionaire hedge fund managers do not fall into this category because they make their millions on the fees they charge investors, not big returns on managing their own investments.

You should not move up to the next level until you've mastered your current skill level and all the levels below. Just as any qualification tests for any license, we say this for your own protection. However, there is no official license required to invest or trade stocks or any other security, so just remember to use your best judgement! If you do things in the financial markets you are not trained for, you will be putting yourself and maybe your family at risk.