By Tom Kirk, President and Wealth Coach

It might be tempting to read and digest all the financial news you can with the hope that this increased knowledge about the financial affairs of the world will lead to better personal financial decisions.

Unfortunately, with the explosion of electronic media content available to us today, we are bombarded with conflicting advice, making it overwhelming to filter through the clutter and create a financial plan that really works for you. You’ve probably seen many articles and blogs expressing completely contradicting viewpoints, at the same time, sometimes by the same company. Logically we would conclude that one view must be right and one must be wrong, for how can they both be true? But, in fact they can both be true at the same time. Let me explain.

Take the hot topic of whether or not you should be invested in the stock market. The apparently contradicting viewpoints are: 1) buy stocks because they go up in value, and 2) don’t buy stocks because they lose money. It is true that stocks have provided great long-term performance; and that investors have lost a lot of money holding them as well. The elastic that makes both of these conditions true is time. There are many one-year periods of time when the stock market has dropped, sometimes significantly. But there are few five-year periods of time during which a globally diversified stock portfolio has gone down in value.

So a strategy to increase your confidence would be to only invest money that you won’t need for at least the next five years in the stock markets. This action would greatly increase your likelihood of a positive investment experience.

Determining if you have at least a five-year investment horizon is relatively easy during the middle of your working years since all but your largest purchases are paid for from your wages. But as you approach retirement, and then actually do retire, it gets much more complex. It requires accurate planning and projection of your cash flow needs into a future, which will likely be quite different than during working years. As Wealth Coaches at FirstWave
Financial, we often find that families are far more aggressively invested than necessary as they are headed toward retirement. They have more stocks than they realize, or that is needed for them to achieve their goals.

By connecting the financial future you want with how much money it will take, you can develop a tailored investment plan that will get you there — in line with your risk tolerance. Through this process you are less likely to be whipsawed by the contradictory financial advice that is all around us. Instead you will confidently know your money is appropriately invested in line with your particular needs and wants.

5 Steps to Increased Confidence in your Financial Future:

1. Clearly identify your tangible financial goals. Be specific as to the time frame by which they are to be accomplished and the amount of money they will take

2. Benchmark your current financial condition- assets, liabilities, income and expenses

3. Identify the risks that need to be managed and the strategies necessary to bridge from where you are now to the achievement of your goals

4. Implement these strategies and monitor your progress

5. Update your goals as your life and financial condition changes and adjust your strategies accordingly


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Tom Kirk, Certified Public Accountant and Personal Financial Specialist, is the founder of FirstWave Financial and creator of The WealthCare Solution™ and The Retirement Plan Optimizer™.