Below are just a few hard truths that, sooner or later, most of us should acknowledge — and do something about.
- If you don’t know what you spend, it’s impossible to have a financial plan. There are dozens of online tools to track spending. We offer clients one through their online portal. Online budgeting tools require very little from the user, except a willingness to accept the results and — if necessary — do something about them.
- The stock market is impossible to predict. As I have written frequently, forecasting whether any particular month or year will be good or bad is a waste of your time. Decide how much of your investing money you can expose to stock market risk, and then ignore the periodic ups and downs. Over the long-term, you will likely do well. Most importantly, only change your investing plan if your personal situation has changed profoundly.
- That special deal probably isn’t that special. Most of us have a friend of a friend who we heard made a killing on some investment. And now we can put some money into it … the proverbial “special deal”. Be careful. The past does not predict the future.
- You too can be hacked or have your identity stolen. I admit: it’s a pain to send sensitive emails securely, freeze your credit or take other steps to thwart cyber criminals. Sure, you may not be a target. But increasingly, the odds are, you will be, at some stage. Take steps to minimize your risk.
- Like a chain, your financial plan is only as strong as the weakest link. For example, if you haven’t bought sufficient insurance or if you haven’t kept your estate plan up-to-date, you may sacrifice all the financial good you have done.
Be honest with yourself. And, if you work with an advisor, expect them to level with you. You’ll be much happier … and safer.