Just like you should be doing with your portfolio, it’s time to take a few minutes and reset. Let’s get back to the basics of financial planning.

Too often we meet with people that one to take advantage of our complimentary 15 minute meeting who have made many basic mistakes and blown up their portfolios. There’s never going to be one strategy that works for everyone, but there will always be guidelines that help you continue to move forward and take steps towards retirement.

So let’s take a look at those today. We’re going to call them the Five Financial Commandments and these are rules of thumb every investor can follow. Doing these things will help keep you from making mistakes that bust open your retirement plans.

No 1 – Thou shalt not compare your investments to the stock market without proper context.

No. 2 – Thou shalt not give up before giving your strategy enough time to play out.  

No. 3 – Thou shalt not chase big returns later in life.

No. 4 – Thou shalt not ignore cost and fees.

No. 5 – Thou shalt not overlook the importance of re-balancing and diversifying.

Joel will take us through each of the commandments and apply them to the planning process. Most of them you’ve probably with us about during conversations but anyone that might not know these rules will get a good explanation.

If you haven’t set up a plan and want to take those first steps towards retirement, get in touch with us and let’s sit down and look through your situation. Remember that it’s never too early or too late to begin planning.

Mailbag

We have time for one listener question on this episode and we’re glad this person is looking ahead at long-term care. They say they are comfortable with their savings but are a little worried about how to approach nursing home care.

We’ll take you through it in the show, but it starts with estimating the costs, which is relatively easy to do. It won’t be an exact amount, but that projection has gotten much better over the years. From there you can either set aside money specifically for that purpose, buy insurance that can cover you, or set up legal structures to protect your assets.

If there’s something on your mind, send it in and we’ll try to get to it on a future episode.

Thanks for listening to this episode. We’ll be back again next week for another show.

[0:43] – Financial commandments today

[1:23] – No 1 – Thou shalt not compare your investments to the stock market without proper context.

[3:49] – No. 2 – Thou shalt not give up before giving your strategy enough time to play out.  

[5:05] – Warren Buffett always finds a way to simplify things.

[5:50] – No. 3 – Thou shalt not chase big returns later in life.

[6:18] – No. 4 – Thou shalt not ignore cost and fees.

[7:08] – No. 5 – Thou shalt not overlook the importance of rebalancing and diversifying.

[8:31] – Mailbag Question #1: I feel good about the amount of savings we have relative to the amount of income we need in retirement. I’m worried about nursing home costs and don’t have a good feel for how to plan for that. What’s your approach?

[10:33] – If someone doesn’t have a plan, what’s the process to make that happen?