Year-end election crisis. Six interest rate hikes. Fears of a hard landing for the economy. Soaring energy prices and recurring whiffs of inflation. With all these uncertainties, domestic and foreign stock markets turned in their worst performance in more than a decade in 2000. What should you do now that the "just right" Goldilocks economy of the late 1990s has become a fond memory?

In this month's article, we'll discuss five savings and investing tips that can guide you through the year regardless of how the market performs in 2001.

1. Maximize tax-deferred investing

Qualified retirement plans have terrific tax dynamics. Be sure to make systematic monthly contributions into your tax- deferred retirement plan. Using the tax savings associated with these investments is almost like the government paying you to save and invest. And if you maximize the amount you contribute each year (currently it's $30,000), you can accumulate almost $1 million over a 30-year career, not counting growth inside the portfolio. With 10% annual growth, you'll have almost $5 million in 30 years. Of course, that's in today's dollars, but it's still a tidy sum.

2. Pay yourself first

The discipline of paying your retirement fund first will earn you enormous returns if you faithfully employ this time-tested principle over the long run.

The United States has among the lowest savings rates in the world. Our clients often complain that there's always too much month left at the end of a paycheck. If you pay yourself first, you might still be broke at the end of the month, but you'll have an enormous nest egg to show for it when you decide that it's time to retire.

After 30 years, a $1,000 per month after-tax contribution earning a 10% yearly return will grow to $2.3 million, or $700,000 in present-value terms if you assume 4% annual inflation.

3. Dollar-cost-average

Some of you may still be wondering when is the "right" time to invest. Is the great bull market opportunity over?

Dollar-cost-averaging (DCA) eliminates the need to engage in this debate. DCA means putting the same amount of money each month into an investment, such as a stock or a mutual fund.

The markets have bad days -- even bad years -- but they tend to go up over time. When you regularly invest a set amount, your investment will buy you fewer shares when the market is high, and more shares when it's low. You'll put dollar-cost-averaging to work and sleep well every night, knowing that, over time, you're buying the number of shares that's just right for your budget.

4. Build a customized portfolio

Whatever your age, you'll need the right balance of stocks, bonds and cash. A simple but effective approach is the "Rule of 100." Subtract your age from 100, and that's the approximate percentage of stocks for your portfolio. If you're a 35-year-old, high-earning physician, you should have 65% of your overall investments in well-diversified stocks or stock funds. The remainder should be in fixed income investments (including real estate such as your medical practice's office building), bonds and cash.

5. Benefit from compounding

The power of compounding puts financial leverage on your side. Simply stated, compounding occurs when the earnings on your investments -- such as dividends, interest and capital gains -- begin to earn returns of their own. That's how $30,000 per year grows to nearly $5 million at the end of 30 years.

All of these rules have tremendous power over the long run, but the longer you procrastinate, the less effective the result. Resolve to start following this advice today to ensure your financial security for tomorrow.

Richard J. Alphonso, JD, CPA/PFS, M.S.T., and Steven A. Estrin, MBA, are president and chairman, respectively, of The Financial Advisory Group, Inc., in Houston. The Financial Advisory Group provides personalized, fee-only financial planning, investment management and business consulting services.