Rather than trying to get every little detail right at all times, I think a better approach to successful financial planning is to avoide bad behavior when it comes to your money.
However, this is often easier said than done.
Because we’re humans.
For those of you playing along at home, I’ve covered a couple of questions from your fellow readers in the last 2 weeks.
Here’s one about how much you pay your financial advisor.
And another about active vs passive investing.
I’ve also published some additional articles on my website that you may be interested in. Here’s one on financial advice for newly single women. I also shared my perspective on the basics of lifestyle investing and the financial planning process.
And here’s a recent article I was quoted in about how information overload can hurt your retirement planning. It was picked up by Motley Fool and several other news outlets.
My very small media empire continues to expand 🙂
Next on the Q&A list this week:
There is so much “noise” people hear about their retirement and future that I think the scare tactics convince people that they have to be in the name brand stocks. They don’t have to be in the name brand stocks and they can be all set if they have patience. But patience is a virtue in today’s world.
This might qualify as more of a comment than a question, but it raises a couple of important points.
First is our tendency to “follow the crowd” with our money decisions. Without considering their circumstances versus our own, if enough people are doing something or it’s on the news or on the TV, it must be legit, right?
Not so fast buckaroo.
See #7 in this list of investing biases for more. And while you’re there, I suggest you review the other 9 in the list as well.
But even more important than our preference to “follow the herd” is our overall behavior when it comes to our money.
Sure, the biases in the list I linked to above is all about behavior. And in the reader question/comment above, they use “patience” as a label for good behavior.
At the end of the day, there is no perfect investment. But if there were, it wouldn’t do you any good if you don’t have the ability to keep your money in the investment over time to actually capture its returns.
Patience helps in this endeavor. So does discipline.
But the best thing you can do to improve your chances of good money behavior is to have a personal financial plan that takes your focus off of the short-term changes in the market, the news, the economy and the political landscape, and places it squarely on achieving the things – financial and otherwise – that are important to you and the people you care about.
Think of your financial plan as a personalized tool to help you focus less on your money and more on the role your money can play in your life and the lives of others.
I just re-read the above paragraphs. They make sense to me. And I hope they resonate with you as well.
Why don’t you let me know what you think? Simply call or send a message and share your thoughts.
And while I have several more reader questions that I’ll be working on in the coming weeks, if you have a question or would like to get a second opinion on something you heard or advice you’ve been given, let me know. I’ll be glad to share my 2 cents on whatever you’re interested in. Just fill out this form, type your question(s), and hit submit. It’s that simple.