Being Proactive in Challenging Financial Times
Confused, stressed, afraid? These are just a few of the emotions people across our country are experiencing in light of the current market situation. Whether you are starting to build a nest egg, or are close to retirement, the reality is that negative market performance has likely impacted your investments. That’s not going to make you feel good, and you shouldn’t pretend otherwise. We are humans, not machines, and humans react emotionally to circumstances beyond (and even within) our control.
The tricky thing with emotional responses, though, is that they may result in ill-advised action—or worse, inaction. It’s nearly impossible to make a sound decision when you are responding out of fear or anxiety. On the other hand, it’s easy to do nothing at all when we are overwhelmed. Neither of these approaches is productive or beneficial over the long term. Once you’ve acknowledged your own emotions, the next step is to take action and take back control of your financial life. Being proactive will empower you. The following suggestions can get you started.
Consider what’s important to you and why
You already know what’s important to you, but you may not spend a lot of time thinking about why certain items are on that list. For example, you may think having money is important to you. Who doesn’t feel that way? But the reason why money is important is likely different from one person to another. You may want to retire early, buy a second home (or a first home), send a child to college, or purchase a new car.
When you explore the reason why things matter to you, what you’re really doing is thinking in terms of concrete goals rather than broad concepts. This is a great way to start taking charge of your finances because you can then generate an inventory of specific goals you want to accomplish.
Develop a financial plan
It’s a bit difficult to create a complex financial plan on your own, but what you can do is take action by finding a professional to assist you. The goals that you have identified are too important to leave up to chance, emotional decisions, or inertia. Once you come to that realization, the decision to craft a plan using the services of a financial professional is easy.
Dispelling myths about financial planning
There are numerous reasons why people choose not to take action during challenging financial situations, especially when it comes to developing a financial plan. There are myriad myths surrounding financial planning, but the following are probably the most common. Don’t let them stop you from taking smart action.
Myth #1: Financial planning is for the wealthy. No. Financial planning is for anyone who wants to take control of his or her financial goals. Consider instead that a lot of wealthy individuals may have become wealthy because they did financially intelligent things like create plans and act on them.
And what does wealthy mean, anyway? The fact is, even millionaires often don’t define themselves as wealthy and may think that they belong to the middle-class or upper middle-class. We’ve come up with so many different terms for people’s economic standing that it’s hard to say where you fall. Why not find out by talking to a professional?
Myth #2: I don’t need insurance until I’m old. Or, I have enough insurance. The amount of insurance you need is based on several factors; age is only one of them. Additionally, we often purchase some form of insurance and then forget about it, thinking we’ve attained what we need. As life circumstances change, your need for insurance may change, too.
Insurance can be a safeguard for your personal income, your standard of living, and your legacy. Surely this type of protection is important enough to warrant closer examination—whether you are 35, 55, 65, or older.
Myth #3: I can’t afford professional advice. It’s true that many people have seen their assets decrease; some may even be suffering from other economic distress. The short-term cost of professional advice, however, may be minimal compared with the long-term cost of not attaining the assistance you need to take action and stay on track. Consider the cost of your sanity—and the idea that you could gain some peace of mind by tackling these issues. Is it greater than the cost of advice?
It’s reasonable to assume that people who already had financial plans in place before the markets started to fall are feeling more comfortable during these tough times because they know that they’ve taken action. You can feel that same way. The choice is yours.
At a minimum, you may want to check out the following websites:
• www.finance.cch.com
• www.mint.com – budgeting information
• www.dinkytown.com – financial calculators
• www.bankrate.com – bank lending rates
• www.annualcreditreport.com – credit reporting information
• www.AARP.com – consumer information
There is a wealth of professional guidance available to you. You can counter the challenges ahead with solid planning and positive, proactive action.
Wendy B. Namack, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional and the Managing Principal of Namack Portfolio Investment Advisors, LLC, North Port Commons, 14892 Tamiami Trail, North Port, FL 34287. She offers securities and advisory services through Commonwealth Financial Network®, a member firm of FINRA/SIPC and a Registered Investment Adviser. Wendy can be reached at (941) 429-3055 or at Wendy@Namack.com.
Please visit her website: http://www.Namack.com for additional information.
© 2009 Commonwealth Financial Network®
The tricky thing with emotional responses, though, is that they may result in ill-advised action—or worse, inaction. It’s nearly impossible to make a sound decision when you are responding out of fear or anxiety. On the other hand, it’s easy to do nothing at all when we are overwhelmed. Neither of these approaches is productive or beneficial over the long term. Once you’ve acknowledged your own emotions, the next step is to take action and take back control of your financial life. Being proactive will empower you. The following suggestions can get you started.
Consider what’s important to you and why
You already know what’s important to you, but you may not spend a lot of time thinking about why certain items are on that list. For example, you may think having money is important to you. Who doesn’t feel that way? But the reason why money is important is likely different from one person to another. You may want to retire early, buy a second home (or a first home), send a child to college, or purchase a new car.
When you explore the reason why things matter to you, what you’re really doing is thinking in terms of concrete goals rather than broad concepts. This is a great way to start taking charge of your finances because you can then generate an inventory of specific goals you want to accomplish.
Develop a financial plan
It’s a bit difficult to create a complex financial plan on your own, but what you can do is take action by finding a professional to assist you. The goals that you have identified are too important to leave up to chance, emotional decisions, or inertia. Once you come to that realization, the decision to craft a plan using the services of a financial professional is easy.
Dispelling myths about financial planning
There are numerous reasons why people choose not to take action during challenging financial situations, especially when it comes to developing a financial plan. There are myriad myths surrounding financial planning, but the following are probably the most common. Don’t let them stop you from taking smart action.
Myth #1: Financial planning is for the wealthy. No. Financial planning is for anyone who wants to take control of his or her financial goals. Consider instead that a lot of wealthy individuals may have become wealthy because they did financially intelligent things like create plans and act on them.
And what does wealthy mean, anyway? The fact is, even millionaires often don’t define themselves as wealthy and may think that they belong to the middle-class or upper middle-class. We’ve come up with so many different terms for people’s economic standing that it’s hard to say where you fall. Why not find out by talking to a professional?
Myth #2: I don’t need insurance until I’m old. Or, I have enough insurance. The amount of insurance you need is based on several factors; age is only one of them. Additionally, we often purchase some form of insurance and then forget about it, thinking we’ve attained what we need. As life circumstances change, your need for insurance may change, too.
Insurance can be a safeguard for your personal income, your standard of living, and your legacy. Surely this type of protection is important enough to warrant closer examination—whether you are 35, 55, 65, or older.
Myth #3: I can’t afford professional advice. It’s true that many people have seen their assets decrease; some may even be suffering from other economic distress. The short-term cost of professional advice, however, may be minimal compared with the long-term cost of not attaining the assistance you need to take action and stay on track. Consider the cost of your sanity—and the idea that you could gain some peace of mind by tackling these issues. Is it greater than the cost of advice?
It’s reasonable to assume that people who already had financial plans in place before the markets started to fall are feeling more comfortable during these tough times because they know that they’ve taken action. You can feel that same way. The choice is yours.
At a minimum, you may want to check out the following websites:
• www.finance.cch.com
• www.mint.com – budgeting information
• www.dinkytown.com – financial calculators
• www.bankrate.com – bank lending rates
• www.annualcreditreport.com – credit reporting information
• www.AARP.com – consumer information
There is a wealth of professional guidance available to you. You can counter the challenges ahead with solid planning and positive, proactive action.
Wendy B. Namack, CFP® is a CERTIFIED FINANCIAL PLANNER™ professional and the Managing Principal of Namack Portfolio Investment Advisors, LLC, North Port Commons, 14892 Tamiami Trail, North Port, FL 34287. She offers securities and advisory services through Commonwealth Financial Network®, a member firm of FINRA/SIPC and a Registered Investment Adviser. Wendy can be reached at (941) 429-3055 or at Wendy@Namack.com.
Please visit her website: http://www.Namack.com for additional information.
© 2009 Commonwealth Financial Network®
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