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Do You Have a System? Thumbnail

Do You Have a System?


We’ve all been told that it’s important to have goals in life.  Whether it’s a continuation of your lifestyle in retirement, starting a new business or running a marathon it is important to have goals and a vision of the future achievement of those goals.  Picture yourself living the lifestyle you desire in retirement, crossing that finish line of the marathon, or running that successful business.  It’s also critical to have a system in place designed to achieve the goal.  No one would contemplate running a marathon without having a training program in place.  A training program with a history of success in getting runners over the finish line.  A training program with proven elements designed for success.

In the investment world it is important to turn your investment goals into lifestyle goals.  It is much easier to internalize a vision of your future lifestyle than it is to visualize having a set amount of money (what does a room containing $1 million dollars even look like?)  Better to visualize your perfect retirement lifestyle: where do you live, what activities fill your day, how are you taking care of your health?  By visualizing your lifestyle you can then internalize the goal and create the system for its achievement.

A system for the achievement of investment goals would include the following basic building blocks: (1) a proper asset allocation between stocks for growth, bonds for income and stability, and cash for liquidity; (2) broad diversification in each of the allocations to include small, mid and large domestic stocks, international and emerging market stocks, government and corporate bonds, real estate, commodities, and other assets; (3) a systematic method of making contributions – or dollar cost averaging; (4) a method of rebalancing the allocations as the investments rise or fall in value; (5) maintaining low costs and avoiding sales charges, transaction charges or surrender charges; (6) avoidance of emotional decision making or any thought of being able to time the markets; (7) a method of distributing the investments while minimizing taxes and avoidance of spending too much or too little.

As with training for a marathon, it’s always good to have a coach to help you establish your training system.  A caring, experienced, fee-only, full-time fiduciary Certified Financial Planner professional can be invaluable to the achievement of your goals.  We have helped hundreds of families achieve their dream lifestyle.  Let us know if we can help yours.