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What is the goal that you have laid out for yourself when it comes to your money? This is actually a critical part of a successful financial plan, as we get distracted by the wrong goals. We think, “well, let’s just try and accumulate more money.”

Happy retired couple going for a bike ride in the city on a sunny dayIf you’re in your 20s/30s and you are investing for 30 or 40 years, it’s a little bit easier to set a program on autopilot and think more just about set money aside and letting it grow. When you get a little closer to retirement, certainly within 10, even 20 years maybe, wee need to be thinking “What is the outcome we are really investing for?” For younger folks, it’s important to do that with your non-retirement account funds. You may be investing to buy a house within six years or to buy a car in three years, but what is it that we’re really trying to accomplish with our money? 

Focus on the outcome and then think about what type of plan you can put together that will provide the greatest chance of achieving that outcome. If you are 60 years-old today and you want to retire in five years, then sit down and determine what income you have, then determine how much income you need. Then see how much money you currently have and if it can produce that income.

We chase returns in the markets with no real goal for that; we are just trying to make more money. To follow up, if you are 60 are trying to retire in five years, then what is more important–to see how much money you can make in the five years, or to make sure you can actually retire in five years? What plan gives you the greatest likelihood? It’s great to try and make more money but is it worth it to try and make more money, go through a bear market in two or three years and then not be able to retire when you are 65> What if you are trying to retire in two years and there is a bear market next year? Are you going to have to put off your retirement because you haven’t really tried to invest in that outcome you were after?

We talk in length about how to do these things. How do you invest for that time horizon to give yourself that high degree of confidence? How about if you are already retired? How do you structure investments to provide steady, increasing, and secure income that you have a high likelihood you are not going to outlive? So, focus on what the money is trying to accomplish, no matter what that goal is, and then focus on getting there.

Bottom line is if there’s one thing we know about the markets, is that we don’t know about the markets. We don’t know what they are going to do, so based on the length required to acheive the outcome you are trying to invest for, you have to have a good plan in place. Again, if you focus on the right things then everything else becomes little more white noise.

So determine the outcome you are after and have a focus on achieving that outcome. Try not to get distracted by all the other white noise.



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