If you don’t know what asset allocation, or lifecycle, funds are, here are a few words by our U.S. finance correspondent:

One of the neatest things to hit your 401k may be “lifecycle” funds or “asset allocation” funds. These are investment options that are mixed up into different types of investments – all in one fund. The reason they’re neat? They make it easy to accomplish one of the most important things an investor needs to do – diversify.

You’ve heard the saying about having all your eggs in one basket. In your 401k, that means that you should consider mixing your savings up among a variety of investment types. For example, you might want some of your dollars invested in the big US companies, some of them in the small US companies, some of them in foreign stocks, and some in bonds (you can even mix it up among different types of bonds – government, corporate, foreign, etc). Depending on your investment menu in the 401k, this can be easy or hard.

If you’ve got “lifestyle”, “lifecycle” or “asset allocation” funds in your 401k, it’s often easy to use one of these funds to help you diversify. You pick one that’s right for you, and let the experts choose how much to put into each type of investment.

Of course, diversifying doesn’t mean you’ll always make money – or that you’ll never lose money. However, it improves your chances while reducing the ups and downs, and that’s about all you can ask for. And as always, you should read a prospectus for important details on any fund before investing.

Many people get very worried about their credit rating, or credit score as they say in the U.S. Here our American finance correspondent expalins a little about credit scores:

Credit scores are a lot like opinions – everybody has one. They got popular from the granddaddy of all credit scores – the FICO score, but since then they’ve come out of the woodwork. Which one is most important? The one that your lender is going to use!

Especially when you’re buying a house, it’s good to know which credit score will be used. For mortgages, lenders most often use the FICO score. FICO is named after the Fair Isaac Company, who developed the secret mathematical formula that makes up the FICO score. FICO is so entrenched that it is sometimes used as a criteria in determining whether or not your mortgage can be sold in the secondary market. The easier it is to sell your mortgage, the more likely it is that you can get good terms.

Nowadays, everybody else has a “credit score” and coincidentally, they look a lot like a FICO score. All of the major credit reporting companies have their own credit scores, and they’ll sell you their score if you let them. While it may be interesting to see variations among scores, it doesn’t do you much good. If you need a FICO score, get a FICO score. That way you’ll know exactly what the lender is looking at.

Where do you get a FICO score? One place to start is Fair Isaac’s consumer website: www.myfico.com. You can buy all three FICO scores (yes, you have three of them – one for each of the major credit reporting companies) for $44.85. If you know that your lender only uses one score, you can buy them individually for $14.95 each.

How do you earn a living in a remote place far away from what passes for civilization now?

It’s not easy, of course, but something with computers and the Internet springs to mind, doesn’t it? But what if you’re a technophobe and hopeless with computers?

Well, all is not lost. Take the amazing story of John Fanuzzi who moved from Philadelphia to Montana in 1980 with everything he owned in the back of a pickup, including his two children of five and two years of age. He was a single father and had a lot on his plate.

He’d done a bit of project managing in the past and was a skilled carpenter. His business idea was to build a company in the unlikely field of massage tables.

Fanuzzi was in this situation because he had injured his back and a doctor said it couldn’t be treated. He was cured, however, by a single visit to a massage therapist. Who says alternative treatments don’t work?

The therapist had told him that it was impossible for him to source a portable massage table for the patients who couldn’t come to him. John was so grateful for his cure, he replied without thinking, “No problem, I’ll make you one.”

He began building it in his driveway, having spent $100 on materials and costs. It was so successful, the news got out and soon orders came flooding in. The problem was, John didn’t have enough to fork out $100 for each table while it was being made. He bridged the gap by asking for a deposit of $100 for each table, then charged $185 for the completed item. Classic bootstrapping methodology. Fanuzzi was in an ideal situation. He had no overheads and lots of customers.

After the move to Montana, he persuaded local teenagers to assemble his products for piece-rate wages and even shipped them on Greyhound buses.

Later, in the 1990s, Golden Ratio Woodworks, based in Emigrant, Montana, became an established and going concern. He was doing $200,000 of business a year. His debts were almost zero and customers paid in cash.

Then it took off in more sophisticated areas of the U.S, like California and the East coast, where buyers thought it “kinda folksy” to order from Montana.

In just a few years, John Fanuzzi had built a national business employing dozens of workers. He had done it with no capital and used basic cash-flow techniques to accomplish his personal American Dream.