How to Have the Best Financial Year

Mirror, Mirror On The Wall Make 2018 The Richest of Them
All

This time of the year the news is full of all kinds of:


investment tips

money tricks and hacks

and bold predictions for the year.



You’ll see articles predicting 2018, even books with people
telling you what they think will happen in the next 12
months. 
if you’re a new client and you come into my office because you
want me to tell you what is going to happen in the next year,
you’re going to be Disappointed.

Myself, my staff and any other financial planner has absolutely
no idea what will happen in the future. We have just as much of
an idea as you do. If this is why you’re interested in financial
planning, you’re better off going to a fortune teller. You’ll
have more fun and the odds of what they tell you being right are
exactly the same.


So, How Should I Plan My Investments Without Trusting
Predictions?


I want you to pause right now.


Think about your investments.


What is the basis for your investment. Are you investing based on
your gut or actual market data and research? Be honest with
yourself.


Most of us invest based on our gut and that’s the number
one thing you want to avoid in 2018.
The worst thing you could do is trust your gut.

It’s incredibly dangerous to trust your instinct and most of us
don’t even realize we’re doing it. If you make decisions about
your investments based on what you think is going well, what is
going poorly, what makes us anxious or even based on your
personality, you’re using your gut to make financial decisions.


Being overly aggressive or too
conservative based on your gut decisions can be a
disaster for your financial planning.


You may not know if you fall into one of those categories, so let
me explain more before I reveal my advice to have you look back
on this year as one you experince incredible peace and growth.


What Does An Aggressive Investor Look
Like?
 


There are two main kinds of aggressive investors that I get in my
office: the first is the person who has no idea they’re
aggressive and the second is the person who is
being aggressive on purpose.


Recently I was talking to a couple in that was nearing retirement
and were very laid back.


When I asked them if they considered themselves aggressive
investors and they told me no. Then, I looked at their 401K and
saw that a large percentage of their savings was in equities, or
money from investments. It was a variety of investments and all
in large companies, but it was still nearly 85% of their savings.
I pointed this out to the couple and they replied, “Yes, but all
our investments are pretty safe.”


This is the problem I’m seeing often.


The incredible growth we’re seeing right now is lulling people
into a false sense of safety. If the market were to have a
regular correction, nothing extreme, but just a balancing out
from the growth we’d seen, they would be in serious trouble.


If you’re near retirement, you should worry about this high
percentage as it makes your savings very volatile.


I also have people come in who are upfront about being aggressive
investors, even though they are closer to retirement. They tell
me they’re doing it on purpose to make up for “lost ground” when
they didn’t properly invest and save in their 20s or 30s. They
were is they’re not aggressive they won’t be able to retire. This
is not the case and is incredibly dangerous.


If this situation applies to you, you are lucky you haven’t lost
your savings already. Capture the growth you’ve had up to this
point and find a way to steadily grow going forward without being
too risky. Sure, the market may continue to grow in the next year
but that small chance is not worth losing all you’ve saved up.
It’s not worth risking your future.


What Does A Conservative Investor Look
Like?
 


I saw an article from the Wall Street Journal recently that
talked about “The Hated Bull Market.”


Right now, more than we’ve ever seen, people are trying to get
out of their stocks despite that high growth. The market is still
thriving and growing, but that’s because it is getting money from
corporations and international investments, not from individuals.
People are pulling out and feeling wary instead of buying in.
They see that there is amazing growth right now and think it
can’t last. This is no different than making decisions based on
your gut.


If you decide to get sell out of your investments because of how
you’re feeling rather than based on data, you could lose money
and miss out on a more comfortable future. These aggressive
investors and those who are conservative are two sides of the
same coin: people who invest based on their gut.
Don’t Use Predictions. Don’t Use Your Gut. What’s Your
Other Option?

Investing is tied to your financial situation. I get so
frustrated when I meet someone who says they spoke to a financial
planner for about 15 minutes, they looked over everything and
make suggestions on where that person should invest.


It’s impossible to make a valid suggestion based on such a short
meeting.
The purpose of investing is not to get a huge pile of money. It
is to get you where you want to be for retirement.

Recently, a couple came in, they were both nearing retirement and
were worried. They asked me how much they need to have saved
before they retire, but that’s not a simple answer. It’s not
about the number in your 401K. Instead, we do an “MRI” of your
accounts. We’re able to look at how much risk they have, based on
their guaranteed income after retirement, their taxes and their
estate planning. Knowing your risk tells you when you’ll be at a
good place to retire.


You can have millions of dollars in savings and still not be
ready to retire.The most heartbreaking conversation I’ve had in
my office was with a couple that had an incredible amount of
money in their 401K and thought they were in a great place to
retire. When we did our “MRI” though, we found that if they
continued their current lifestyle they would only be able to
survive on their savings for 5 years.


The point is this: don’t invest based on your gut or predictions,
do it based on the plans you have for the future. This is not a
subtle difference. You need to be investing based on your total
financial situation and the risk you can take. Financial planners
can help you evaluate that risk and make good investment
decisions.


How You Can Have The Best Financial Year
 


The thing I hate about most financial planners is that when new
clients come in, they give them a “financial risk questionnaire”.
It helps evaluate your risk tolerance, but the problem is that
it’s mostly based off their clients' emotions. If the market is
doing well, almost everyone is comfortable with risk, but as soon
as things start to go down, their feelings change.


To me, it’s more important that we’re blunt with each other about
the risk you can actually handle. It doesn’t matter how
you feel about it. It’s about how much your savings can drop if
you continue to invest the way you are currently. Is
your risk sustainable? We can show you data and research to
support our evaluation of your risk.


What’s the result? Peace in your financial future.


You know that even if things go badly, you’re still going to be
okay. This is the only form of planning I’ve seen be truly
successful because you know what you can handle.
If you know in your heart that you are investing with
your gut, make this the year you start planning based on what you
want for your future.

If you know in your heart that you are investing with
your gut, make this the year you start planning based on what you
want for your future. If you know how to do that, you’ll
find so much more peace as you go into this year. If you don’t
know where to start, we will help. We’ll evaluate your risk and
see how to get you to the future you’ve dreamed about.


Find Peace Of Mind This Year