Sep 28, 2018
Learn how financial news from the past affects us today. We also
talk about correlations between hurricanes and retirement planning.
We also discuss some of the reason people procrastinate when
Main Questions Asked:
How can lessons of 2008 help me today?
Can retirement planning help me sleep better at night?
Will everything work out if I don’t plan at all?
Key Lessons Learned:
Bringing Back Old Financial News
Memories of 2008. Protected portfolios only went down around
10%. There was fear and it took a lot of discipline not to make
knee-jerk reactions. Making changes when markets are low, and you
will miss out on the upswing. Markets go up, and markets go down.
The key is to have the proper asset allocation.
Hurricanes and Retirement Planning
- The eyewall replacement cycle. The strongest winds in a
hurricane are the winds closest to the eye. When the inner winds
weaken. it's like the hurricane is shedding its dead weight and
becoming more powerful. Your retirement plan should work the same
way. As you get closer to retirement your growth investments
shouldn't be the same. You should shed your growth investments and
shore up with income growing investments.
- Being without power. If you're going to be without power for
any period, you have to have a backup plan. Your investment should
be the same way. If your paychecks are going to stop. Do you have
everything you need to keep functioning without them.
- How computer models and meteorologists bring two different
things to the table. Some use their gut, and some completely rely
on computer models. It's very similar in the investment world.
Computer programs can tell us a lot, but they are not a replacement
for wisdom. The biggest job of a financial advisor is keeping you
from doing the wrong thing at the wrong time.
Reasons Why People Procrastinate When it Comes to
- My parents never planned, and everything worked out fine for
them. Things were different in those days. People had pensions, and
Social Security made up a bigger part of income. We have to do
better and save in our 401(k)s and manage the money properly.
- There are so many voices, we just don't know who to listen to.
Our access to so much information has caused more confusion. Find
one or two good advisors to simplify things.
- Dealing with financial stuff stresses me out. Sometimes when
people get overwhelmed, they avoid things. Find someone you can
trust to walk you through things. Once you have a good plan in
place, your stress levels will go down.
- I'm just too busy. It's about priorities. If you are too busy
to put a retirement plan in place, there will be a heavy price to
pay. There is a good chance, you are taking more risk than you need
to be. It's time to get a good plan in place.
Links To Resources Mentioned
Money Map Retirement Review
The Ultimate 401(k) Guide
Thank you for listening!