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Four Tips For Financial Success
For tips to achieve financial success we have to look no further than Mother Nature. Have you ever noticed how Mother Nature doesn’t rush? Each element of nature seems to wait patiently for its turn to flourish. Each season miraculously unfolds after the next. Mother Nature doesn’t seem to rush ahead.
Mother Nature is equally elegant on stormy days as on sunny days. I don’t’ think she spends time looking back, wondering if she could have used yesterday’s sunshine more effectively. I also don’t think she bothers to worry about what tomorrow will bring. I imagine her focus is on the present moment and on being her best self right now.
This got me thinking about how I can be my best unhurried, present-moment self, to help you be your best unhurried, present-moment self with your finances. I started asking how I could help you right now do more with your money to protect your lifestyle and achieve financial success and security for you and your family.
Here are four tips to help make this year your best financial year yet.
1. Do a Spending Review.
You and your family’s financial well-being later in life will depend largely on what percentage of your income you’ve managed to save and invest. Research shows that millionaires invest at least 20 percent of their incomes annually. Here’s a challenge for you. Take a look at how you spent your money last year by reviewing your bank and credit card statements. Don’t spend time looking back and wishing you had spent your money differently. Simply decide whether you’re happy with how you spent your money last year. If you’re happy, congratulations. It seems that you’re spending only on what’s important to you. If you’re not happy, it’s time to decide what’s important to you and what you plan to spend your money on. Then make this your focus going forward.
2. Mix It Up.
History has proven that markets advance permanently even when they occasionally contract cyclically. What this means is there is no reason to panic when the market contracts, and not even if the market crashes! Because markets go up over the long term: always have, and probably always will.
Now imagine the consequences if the news channels reported ‘not to worry’ because the markets will eventually move permanently upward overall. In a few months, they’d be out of business! What’s important for you, in the long run, is your investment asset allocation. That is, what mix of equities (including your own business), fixed income, insured deposits, property and cash do you hold. Are you overweight in one area, for example, compared to another based on your investment risk profile? If you’re like most business owners, it means your only investment is your business. Hence, you are overweight in one stock – your own.
As Canadians, we also have a Canadian market bias in our asset allocation. We’re overweight in Canadian investments. But, Canada’s economy is in a slump, and – according to Kevin O’Leary –almost in a recession. I’m currently reviewing client asset allocations and making recommendations to broaden market and sector holdings. I can do this for you too!
3. Plan to Achieve Financial Success.
Behaviour has historically cost investors. The fact that markets are not doing what you want them to do is not a criticism of the markets. Nor is it an intelligent basis for making significant changes to your investment plan. Market volatility is nothing more than a focal point for short-term thinking and impatience. You don’t immediately think when the economy is unfavourable that you’re going to sell your business. The same goes for your investments.
I don’t know when the markets are going to come right. I just know that, eventually, it is going to turn out all right. You just need an investment plan and you need patience. If we haven’t reviewed your plan recently then now is a good time for us to get together. If you don’t have an investment plan then now is a perfect time for you to get one. Having a plan means your investing becomes goal – rather than market -oriented.
4. Get Help
Depending on your current situation help could take on many different themes. If you want to be financially successful, you need to do more than simply earn a lot of money. You need to review your spending and make decisions on how you want to spend and invest. If you want to invest successfully you need to plan for your success by ensuring you’re invested in a diverse mix of assets. And, like Mother Nature, you need the patience to weather the ups and downs.
Mother Nature’s unhurried present-moment approach offers inspiration. You can take small, deliberate steps to manage your money today that will help you achieve your aims and aspirations tomorrow.