Below is my “top seven” list of things you can do to set yourself on a more prosperous track this year. But please, pretty please, don’t just stuff these items into a drawer.

Instead, be realistic. Pick a couple of actions from the list (I suggest no more than three). Then go to work immediately, this week if possible. You’ll notice that each item on my list requires only one step. No follow-up necessary. If you act now, you can sit back and watch the benefits accrue throughout the rest of the year. Ready to rock? Here we go…

1. Boost the yield on your “lazy” cash.

Banks and brokers adore customers who leave money idling in accounts that pay next to no interest. Don’t stand for it. Even with the recent rate cuts by the Federal Reserve, an Internet-based bank like EmigrantDirect is still paying 4.65% on money market accounts, with no minimum balance (800/836-1997 or www.emigrantdirect.com). Discount broker e*Trade (800/387-2331 or www.etrade.com) is even offering a luscious 5.05% on FDIC-insured deposits through its e*Trade Bank unit.

Like Emigrant, e*Trade has no minimum to open an account. Because of the brokerage’s wellpublicized financial difficulties, though, I advise you to remain strictly within the FDIC insurance limits ($100,000 per depositor).

2. Make the biggest contribution you can to a tax-deductible savings plan.

For most people, the most basic tax-favored savings tool is an employer’s 401(k) plan. If your employer offers any kind of matching grant to supplement your own contributions, treat it as free money. Grab as much as you can!

Furthermore, I generally advise folks to take their 401(k) contributions to the limit allowed by the plan before branching out into other kinds of investments. Quite aside from the tax shelter, the discipline of having a fixed sum taken out of every paycheck can work wonders. You’ll build wealth much faster than if you invest only when you’ve got “spare cash” on hand.

For 2008, the legal limit on employee contributions to a 401(k) is $15,500. (Over age 50, you can kick in an extra $5,000.) A similar limit applies to plans sponsored by nonprofits and government agencies. Depending on their income, selfemployed people can contribute up to $46,000 to an individual or “solo” 401(k), with an extra $5,000 allowed if you’re over 50. Virtually all brokerages and mutual fund families welcome individual 401(k) plans.

3. Close at least one mutual fund or annuity account that no longer meets your needs.

I'm a strong believer in long-term investing and low turnover. Don't shuffle investments for the sake of shuffling. In my experience, though, people tend to hang on to some investments too long. If, for example, you bought a so-called "emerging growth" fund in the late 1990s and it's still under water, 2008 is the year to move on. Upgrade to a more stable large-cap growth fund.

Fixed annuities paying renewal rates of 3% or less are also excellent candidates for the heave-ho. Often, you can swap these for a more competitive annuity in a tax-free 1035 exchange. For up-to-theminute annuity quotes, get in touch with broker Charles Cox, Jr. at UBS in Boston (800/225-2385, ext. 8307).

4. Build your holdings of high-dividend stocks.

2007 was an off year for the high-dividend strategy, largely because of troubles in the financial sector. However, many companies whose stocks made little headway last year are still churning out superb operating results. At today's higher yields, these champions are a better buy than ever. For details on My 3 Top Picks for 2008, click here to read my Special Report. It details three high-quality income investments with yields that have remained quite high, despite the recent rate-cuts.

5. Upgrade to a safer stockbroker.

I can’t stress enough the importance of checking out your broker's financial health, especially if you've got an account worth more than $500,000 (the limit on insurance provided by the quasi-governmental Securities Investor Protection Corp.).

Of the biggest discount brokers, Fidelity boasts the strongest balance sheet by my calculations. Schwab and TD Ameritrade are in robust health as well. I continue to have reservations about e*Trade and advise you to stay below the SIPC limit if you do business with the firm.

Among the second-tier brokers, my favorites in terms of financial strength are Ameriprise and Scottrade.

6. Donate appreciated stock to charity.

For tax purposes, if you've held a stock for more than a year, you can deduct the fair market value of the gift, rather than your cost basis—a nice incentive to give away stock that has gone up dramatically since you bought it. The fair-market-value rule comes in especially handy for donating units of a master limited partnership, because your cost basis in an MLP declines over time (increasing your tax liability should you decide to sell, rather than give the units away).

Not sure where you want the money to go? Set up an account with Fidelity Charitable Gift Fund (800/262-6039 or www.charitablegift.org). You can deposit cash or securities; if securities, Fido will sell them and invest the proceeds in your choice of 13 mutual fund pools. Then, at your leisure, you can make grants to your favorite charities in amounts of $100 or more. Minimum to open an account: $5,000.

7. Take a knife to your insurance costs.

I recently spent an evening counseling a couple with young children. These folks had an ample income, but couldn't seem to make ends meet. As we peeled back the onion, it soon became apparent they were laying out far too much for life insurance. Instead of costly whole life, I recommended a 10-year level term policy with AIG Life (800/586-3072 or www.aigtermlife.com). For $250,000 of coverage, a 40-year-old male pays only $14.44 a month. Females are even less!

You may be overpaying for auto or homeowner's insurance, too. GEICO (800/861-8380 or www.geico.com) is well known as the low-cost provider for auto insurance in many jurisdictions. GEICO is also trying to horn in on the homeowner's market, so you may find it worthwhile to request a quote on both types of coverage.

Even if you prefer to stay with your local agent, ask about the cost of combining your auto and homeowner's in one policy. Often, you can save as much as 15% by purchasing an omnibus policy from a single company. That's what I did—and even GEICO couldn't match the rates I got from a smaller regional insurer.

Have I given you enough to chew on? I hope so. But don't chew so long that you wear your teeth down! If you can put just a couple of these ideas into practice, I'm confident 2008 will be one of your best investing years ever!

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