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Create a Financial Plan to Enjoy Life's True Riches

The ultimate goal of most investors who follow the stock market on a daily basis is to see the value of their own investments go higher. Who wouldn’t want to make money every day, become rich and have the funds to live a good life? But being rich is not necessarily about how many dollars you have, it's about feeling at peace with your investments and finding happiness in the world you have created. 

Have a Plan

To have a rich life, you need to be at peace with your own plan and your own objectives. Have your investment dollars work in a way that will complement your plan. Sometimes your investment portfolio will go up, and sometimes it will go down, a lot. The most important thing is to make sure you have enough money for the world you want to live in.

Define what your world means to you. Spend time with your family and friends. Avoid any negativity that may bring you down. Figure out what makes you smile and determine how much those things cost. 

Create Your Investment Strategy

This is where some analysis comes in to make sure your investments will fit into this world you have defined and the financial plan you have put in place.

To meet long-term needs, think of your money in different buckets. Also called mental accounting, you want to have money available in the near term, the five-year timeframe and the ten-plus-years timeframe. The first and most important is the near term and this should be subject to minimal fluctuation risk. Keep more than you need in this one so you can be confident with how the other buckets are invested.

The intermediate term should be filled with fixed income and equity investments to balance your holdings for a slow and steady climb. The last bucket— the long term—go nuts! Well, not really. It is, however, the place where you want your growth to support the longevity of your plan.

Make cash part of your investment strategy to help you sleep well at night. Not only should you keep enough cash available to spend, but also make it part of your investment portfolio. (For more from this author, see: Holding Cash Instead of Chasing Investment Returns.)

Buy and Sell at the Right Time 

The idea here is to buy when others are fearful and to sell when others are a bit too excited. If you have a positive outlook, you will be well on your way to always feeling rich, and this idea of staying active with your portfolio will give you even more to be happy about. Most would argue this is not that simple, and it’s not. This is where technical analysis comes into play. Having riskier assets in your portfolio makes sense and offers a great complement to other strategies that build the foundation of what gives you peace and helps you sleep at night.

This advice is not much different than what most advisors might suggest during a formal financial planning process, it's just put in a different way. The important parts of life have more to do with family, friends, and the people and places you know and love, and having a financial plan in place will allow you to focus on these true riches. 

(For more from this author, see: How Fed Rate Increases Impact Investors.)


Disclosure: Past performance may not be indicative of future results. No current or prospective client should assume that the future performance of any specific investment, investment strategy (including investments and/or investment strategies recommended by the adviser), will be equal to past performance levels. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a client's investment portfolio. The information presented herein is intended for educational purposes only, and is in no way intended to be interpreted as investment advice. In considering the information presented, readers should consult their own professional advisers, as there is no substitute for personalized investment or tax advice. Any charts, graphs, or visual aids presented herein are intended to demonstrate concepts more fully discussed in the text of this brochure, and which cannot be fully explained without the assistance of a professional from Econ Wealth Management. Readers should not in any way interpret these visual aids as a device with which to ascertain investment decisions or an investment approach. Only your professional adviser should interpret this information.