The 3 Critical Concepts to Master Money in a Tough Economy
The 3 Critical Concepts to Master Money in a Tough Economy
Working with people and their money has lead me to great insight as to how one thinks when encountering difficult situations. A tough Economy qualifies as 050-891one such difficult time. The 3 Critical Concepts to master to "come out on top" are as follows:
Have a good plan
Many times we as individuals feel as if we can "play it by ear" or "just go with it", sometimes you can, but in tough times you better have a great plan. Making your money work, and work for you, requires a good strategy. Realizing what you were hoping to achieve, when you want all or part of your money back, what investments fit for what time frames, and how the choices you make impact the overall picture are a few of the thoughts and ideas that must go into your plan. The plan should also be written, or at least analyzed by some unbiased third party. That means, have a friend, advisor, spouse, business partner, look over the plan to make sure it is feasible. The person may not understand investments, but should have a good idea if it all makes sense. The person (and you) should know your style and how much risk you want to take. A good plan must be right for you, no one else. It is your money, and your lifestyle, it must fit you!
Analyze what is real and what is Not Real
. Once the plan is in motion you must track progress and look at your benchmarks. Too often people will assume that the return for that particular year is the only thing that matters. Not True. You may be in the accumulation part of your plan, and acquiring more at a lower cost is the perfect part of that phase. You also could be in the payout part of the plan, and then income is the most important part of your asset, and not returns. But, you must look at what is Real and what is Not 050-691Real. Too often we tend to follow what the media says, or our neighbor (who is a part time worker making minimum wage), or some other entities view. You must look at the whole picture, not what sells newspapers, magazines, or radio spots. Fear sells those items, you are working a plan. Analyze what is real, not what is fear. If everyone is selling, buy. If everyone is buying, sell. Be prepared to swim against the tide, and know what works for you in the long run. Base your decisions on facts, not on emotions. This is the real value of an advisor; they can look objectively and not emotionally on the current situation.
Make small adjustments, but stick to the Plan
. When reviewing your strategy and investments look at the data, but stick to the plan. If a money manager changed, you may want to change the investment, but stay in the same asset class. Realize there should be minor changes, not huge swings. In preparing your plan you knew the times were going to change and be050-696 tough, look at track records, keep emotion out, and follow your plan. Develop a long term perspective, that doesn't necessarily mean long term investments, just try and think of what your life may look like longer than a few weeks or months out. The longer you can view, the less hard tough times will look.
By working these 3 steps you too will be well on your way to creating a life you want to live!
Working with people and their money has lead me to great insight as to how one thinks when encountering difficult situations. A tough Economy qualifies as 050-891one such difficult time. The 3 Critical Concepts to master to "come out on top" are as follows:
Have a good plan
Many times we as individuals feel as if we can "play it by ear" or "just go with it", sometimes you can, but in tough times you better have a great plan. Making your money work, and work for you, requires a good strategy. Realizing what you were hoping to achieve, when you want all or part of your money back, what investments fit for what time frames, and how the choices you make impact the overall picture are a few of the thoughts and ideas that must go into your plan. The plan should also be written, or at least analyzed by some unbiased third party. That means, have a friend, advisor, spouse, business partner, look over the plan to make sure it is feasible. The person may not understand investments, but should have a good idea if it all makes sense. The person (and you) should know your style and how much risk you want to take. A good plan must be right for you, no one else. It is your money, and your lifestyle, it must fit you!
Analyze what is real and what is Not Real
. Once the plan is in motion you must track progress and look at your benchmarks. Too often people will assume that the return for that particular year is the only thing that matters. Not True. You may be in the accumulation part of your plan, and acquiring more at a lower cost is the perfect part of that phase. You also could be in the payout part of the plan, and then income is the most important part of your asset, and not returns. But, you must look at what is Real and what is Not 050-691Real. Too often we tend to follow what the media says, or our neighbor (who is a part time worker making minimum wage), or some other entities view. You must look at the whole picture, not what sells newspapers, magazines, or radio spots. Fear sells those items, you are working a plan. Analyze what is real, not what is fear. If everyone is selling, buy. If everyone is buying, sell. Be prepared to swim against the tide, and know what works for you in the long run. Base your decisions on facts, not on emotions. This is the real value of an advisor; they can look objectively and not emotionally on the current situation.
Make small adjustments, but stick to the Plan
. When reviewing your strategy and investments look at the data, but stick to the plan. If a money manager changed, you may want to change the investment, but stay in the same asset class. Realize there should be minor changes, not huge swings. In preparing your plan you knew the times were going to change and be050-696 tough, look at track records, keep emotion out, and follow your plan. Develop a long term perspective, that doesn't necessarily mean long term investments, just try and think of what your life may look like longer than a few weeks or months out. The longer you can view, the less hard tough times will look.
By working these 3 steps you too will be well on your way to creating a life you want to live!
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