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Take your vitamins, get plenty of exercise, eat well, brush your teeth. These are simple tenants of our basic care along with keeping up on an annual physical or any other milestone tests that are recommended for preventative care. As a result, there is a greater likelihood that medical issues can be found and addressed earlier on or prevented all together. So, the big elephant in the room is why aren’t we treating our money in the same way? The same simple concepts can easily be translated into healthy money habits however knowledge is only half the battle and action is needed to make a difference in your financial outcomes. Let’s talk a little about the similarities and what you can do:

Proper Allocation

This is our “eat well” part of the equation as financial healthis paralleled to physical health, and this is because the right allocation considersthe trade-offs that can and will occur over time. A proper allocation won’tonly look at the average return, but it will look at the amount of volatilityon both the gains and losses that the portfolio could experience in relation toyour needs. What this means is that a financial planner will have the toolsavailable to look at considerations like inflation and sequence of returns tosee if those risks pose a threat with your allocations now and in the future. Formore information on sequence of return and inflation risks see TheTop 6 Things You Forgot to Consider While Planning For Retirement.

In short: proper allocation is something that can give you alonger term perspective and avoid some panic when markets hit volatile patches.

Proper Planning

Will you have enough for your goal in the time that you’ve planned for? Should you take that company pension offer? How about Social Security, should you take that immediately or bridge with your savings before taking it at a later time? These can all be parts of your planning that have not gone through a thorough consideration if you haven’t run a full financial plan, for instance. Moreover, proper planning will set the goals that you have in mind, let you know if you are on track (or the steps that you need to take to get on track) and continually assess if you are staying on track over time as markets, needs and life events change things along the way. What is most important about partnering with a financial planner is they will not only cover the very detailed math that goes along with inflation, market outcomes, potential taxes, social security optimization, proper insurance coverage and investment fees. They will also go over the proper expectations for your portfolio as well as know if you can tolerate the range of outcomes.

Proper Planning: Beyond the Numbers

A skilled financial planner will also work to understand (and potentially help you understand) your relationship with money: what it meant to you growing up, what it means to you now and what it may mean to you in the future. In other words, outcomes are not your goals. For example: retirement is not your goal, how you want to live retirement is. If retirement were simply your goal it wouldn’t matter if it was spent with a paycheck to paycheck approach of just covering your essential bills or full of travel, security, piece of mind and independence. Every person is different in what their journey is for their goals but one thing is common: there are always additional values, fears or needs that should be addressed alongside the goal that is being set.

For more see: 6 Reasons to See Your Financial Planner Right Away

Annual Check-Ups

Just like a physical is needed for our health to beevaluated year over year an annual review should be your financial physicalevery year. You may be thinking that its not necessary because everything hasbeen going so well and/or because your portfolio has grown steadily over theylast 8-10 years but beware that this is like skipping the physical because youdon’t see any outward symptoms to address. This is a dangerous game that youcould be playing because there may be things under the surface that can becaught by a professional planner that you otherwise wouldn’t see in your day today overview of the portfolio itself. Its an ounce of prevention that is wortha pound of cure. Furthermore, life will happen and as a result you should havea plan in place while also having a healthy relationship/trust already built upwith your financial planner before the time comes to address stressful lifeevents (job loss or job changes, market losses or high volatility, health care concernsor needs, and the addition or loss of a family member). I equate the lack of workingwith and advisor and establishing trust before its needed to waiting until youhave major medical events before seeing a doctor. Nothing is worse than hearing“if we only caught this sooner” so don’t let that be the case with yourphysical or financial health.

Tune Out the Noise

Know your situation, understand your goals and better beaware of what you should and shouldn’t be concerned about as it relates to yourinvestments as well as your investment goals. This is so important because youwill hear a lot of “noise” from the news, from your friends (if you talkinvestments with friends) and from your own doubt. News outlets only survive bykeeping your attention, and a study was done that when a news station onlyplayed positive news/stories the ratings went significantly down because concernholds the attention of an audience more than anything else. Furthermore, whatis good for your friends doesn’t mean that it’s good for your personal goals orsituation. What is most important is that you understand both your goals andthe needs to reach them. For more on this read our previous post WhyYour Goals Are The Only Index to Measure Against. This helps you to keepthe focus on what’s important your financial values and goals allowing you to “tuneout” all the extra noise.

Looking to Discuss Your Situation Further?

It’s never too early or too late to get started! If you areinterested in speaking with a Financial Planner here at Coastal Wealth Plannersyou may choose from the following:

 Complete Our New Client Questionnaire

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You can always reach us by phone as well at (732)554-1099 or [email protected] .

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