A Good Financial Plan Helps Keep One on Track & Can Minimize Distractions

A Good Financial Plan Helps Keep One on Track & Can Minimize Distractions

January 04, 2022

At the beginning of each new year there are many headlines and topics that seek to grab our attention.  Inflation worries, New Year’s resolutions, technology innovations, weather events, new variants of the pandemic, the latest fads, politics, and the growing national debt are some of the headlines this year.  Topics worthy of discussion, but if we are not careful, they can play to our impulses.  A customized financial plan with appropriate investment allocations for each individual or family can address many of the issues providing a level of assurance when storms arise and seasons change.                                                                                                

Failed or underperforming investors, in my experience, diminished their results by allowing headlines to become distractions and reacting with emotions to current news events in the economy, markets, and headlines. On the flip side, every successful investor I have known was acting continuously on a financial plan and updating it when significant life events take place. I’ve also observed that successful investors share similar characteristics.

  • They have an optimistic outlook and faith in the future. The outlook is balanced and realistic, not foolishly giving in to fear or euphoria.   “I am an optimist. It does not seem too much use being anything else.”   -  Winston Churchill
  • They maintain patience and keep a long-term view by acting on well thought out and written plans.     “The two most powerful warriors are patience and time” - Leo Tolstoy
  • They have the discipline to avoid giving in to emotions and reacting to the current headlines of the day that fan two types of fear; FOWE (fear of world ending), or FOMO (fear of missing out). I’m reminded of Morgan Housel’s quote in his essay “Too Much, Too Soon, Too Fast”.    A good summary of investing history is that stocks pay a fortune in the long run but seek punitive damages when you try to be paid sooner. Virtually all investing mistakes are rooted in people looking at long-term market returns and saying, “that’s nice, but I can have it all faster.”

For several people, adopting and maintaining these characteristics includes having a trusted and competent financial advisor, a coach if you will. Much like many who have a trusted therapist for physical therapy, trainers for fitness and other disciplines.  A financial advisor who understands your financial goals and objectives can provide calculated advice from their knowledge and industry experience to help guide their client with financial decisions through life.

As you begin this new year, be sure to have an optimistic outlook, set realistic goals, maintain patience and discipline, and keep your life balanced in all areas.  If you recognize the need and value of having a trusted financial advisor and coach but do not have that relationship established, you should make it a priority to find one and put it at the top of your New Year’s resolution list. In the words of Zig Ziglar, “motivation gets you going, and habit gets you there.” There is no time like the present to have a financial plan prepared that will cast a vision for your future you can lean into with confidence despite distractions that arise during the year.

Wishing you much success in 2022!

Content prepared by Ron Ring, President Ring Financials Services, Lexington KY, 40503

Securities and Advisory Services offered though LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.