We are replaying one of the most popular shows and will return next week with a brand new show.
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 planning retirement.
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. 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 Financial Planning
- 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
Thank you for listening!