Planning Your Financial Future

It is interesting how we make decisions, take actions and affect our futures.  Most of us are smart people.  We think we have control of our lives, our actions and where we are going.  But do we?  For some reason I’ve been bored watching the financial pornography the last few weeks predicting that the market is going to 20,000, saying that the economy is going to collapse, telling you it’s time to buy and telling you it’s time to sell.  Yet no one really knows!

No one can really tell you what’s going to happen tomorrow, next month or even this year.  They will all guess and give you their predictions but it is random luck that leads them to be right.  This is true, because there are thousands of random things affecting what’s going to happen tomorrow when the stock market opens.  Of course everyone at the end of the day writes a brilliant article about why it went up or why it went down.  Where were they at the beginning of the day telling you exactly what it would do so we could have made money off of their brilliance?

If you insist on listening to the bobble heads filling your head with useless information I suppose there is nothing I can do for you.  But then, if by chance you’re willing to take control of your financial future and your destiny and put predictability into your results maybe we should talk, since no one really knows what’s going to happen.

Should we have a plan that allows us to go have fun with our grandkids, go fishing or just go smell the roses?  It’s your choice!

Maybe the following would be appropriate then:

1. Be true to our risk tolerance and do not get more aggressive when markets are good and less aggressive when markets are bad, which in my opinion positions you for dismal returns at best.
2. Make sure that we can live on 3% of our financial wealth and ignore those that tell us how great it is and that we could spend more.
3. Have six months in emergency funds regardless of how positive we are about our good health and the safety precautions that we take in our lives every day so that bad things do not happen.
4. Have no debt and don’t spend unless we can afford to purchase the items we are buying.
5. Have five years of conservative assets that we can live on when markets go down, no matter how aggressive someone tells us we could invest or how much confidence we have in our brilliance to predict the future.

Remember that no plan or strategy can assure a profit or protect against a loss.  But if we did these things the probability of success in our financial plan could potentially be better.  But the only way we can really successfully do these things is to not listen to the noise, not listen to the financial pornography, to have faith in a process and a plan that statistically leads us to probable success.  Can you do this?  Yes!!  But the most important thing is:

 The plan

So take a deep breath, and build a plan for your financial future as well as the financial futures of your families and those you care about.

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS

Personal Financial Advocate