Should I have done a financial planning blog? Oh, God, no. First, I would have to submit all my posts to my company’s compliance department to make sure the “disclosures” are in place. They go like this: Past performance does not guarantee future performance – not FDIC insured. Yadda, yadda, yadda. Nothing ruins a good post quicker than some fancy legalize! Second reason – financial planning is just not funny! It is BORING – yet necessary. However, I do wish to express some of my thoughts in the hope that it may help someone.
The most important thing for you to know: Your biggest risk when doing your financial planning is not the volatility of the market. I acknowledge that the ups and downs can be intimidating. But the truth is, you must get over your fear now. Not being in the market is your biggest risk! Most people do not have their money working hard enough for them. It is very probable that unless your money is earning you dividends and interest, you may not have enough of a nest egg to make it through retirement. And plan on either you or your spouse living to at least 95.
Are you afraid that you will lose everything? Do you have too much of your savings in the bank earning next to nothing? If so, I strongly urge you to do some additional research. Don’t take my word only – but you will find out that I am right. You have worked hard for your money and it needs to work hard for you.
I like to share this:
You put your money in the bank and the bank gives you 1%. What do you think the bank is doing with your money? They either lend it out and make 5%, or they invest it and make 5%. How nice and convenient for the bank! Why should the bank get what could be yours?
How do you give yourself peace of mind and get over the fear? It starts with having some of your money in the bank. This is your emergency fund. Then you begin to invest the rest in a well diversified portfolio appropriate for your age, risk tolerance, and life goals. You need to go to an advisor that is a fiduciary or get a really great grasp on investing. A good advisor probably will earn you more than what you can do yourself, which should cover their fee and then some. Plus, advisors have access to research that the average person does not have the time or expertise to get on their own.
Jeez, I am starting to realize there may be some things I may want to share with you in a future post. For example, what is an appropriate fee for an advisor to charge? What is an appropriate expense for your portfolio to charge? Do you need a trust? Should you fund a Roth IRA? Can you time the market? And lots more. Damn, I guess their is more to life than the best banana pudding!
If you found this helpful and you would like me to post more about financial planning, let me know. If you have a specific question, feel free to ask me. I love to help people because someone helped me. There is no better pearl than having the peace of mind that you are doing all you can to have a nice retirement.
Happy planning!
Photo by Fabian Blank on Unsplash