Laying a Solid Foundation
In this part . . .
Before you make any investment decision, you can
benefit by balancing current events with some historical
perspective. Life is full of uncertainties, so in this
part, you get a thorough review of some personal financial
planning strategies that’ll help you minimize or avoid
many of the financial uncertainties you face.
Keep Your Feet on the Ground
Successful investors are grounded. They’re logical and disciplined, and
they don’t let emotions drive investment decisions. Successful investors
understand and embrace the idea that the economy is always uncertain; it may
have seemed more certain in the past, but that’s with the benefit of hindsight.
The U.S. economy has cycled between good and bad times, and you can
expect that trend to continue (see Strategy #2 for more historical perspective).
Unless you think that trend will end and things will always be either
good or bad forever, every bad period must be followed by a good period
and every good stretch has to be followed by a bad one. The big unknown is
how long each period will last.
People often focus on an unanswerable question: When are things going to
turn around? When times are good, your investments do well and you hear
rumors of bigger bonuses at work this year. The question of when it’ll all
change seems less important, but the answer still remains uncertain. The
question is much more pressing during the bad times, when investments
haven’t performed well or talk of an economic recession picks up. However, if
you embrace the fact that the economy is always uncertain, the strategies in
this book can help you make better decisions about your investments.
This book is filled with information on the tactics, strategies, and steps you
should take with your money. But this strategy is focused on how you — the
key player in your financial life — need to prepare for and approach your
finances. The following guidelines will help you ensure that your attitude,
decisions, and behavior truly support your desire to invest successfully
during uncertain times.
Invest in Yourself
You are your biggest asset, thanks to your ability to earn money, and you
need to protect and develop that asset. This means more than the occasional
doctor’s visit and a jog around the block. You can let yourself sink into a rut,
afraid to move, or you can challenge yourself to move ahead and earn a new
degree; seek out a new, potentially more rewarding job; or master new technologies
and apply them in your professional and/or personal life.
You may also need to retool your physical plant, so to speak — losing weight,
improving your focus and energy level with exercise, or budgeting for additions
to your wardrobe so you feel good about the way you look.
No matter your age, show a real interest in being a part of fast-paced change,
or risk being considered a dinosaur (remember — they’re extinct). Not only
do these steps better position you for the uncertainties of life discussed in
Part I, but they also help you increase your value:
- Make yourself indispensable at work. See Strategy #4 for tips about
beefing up your networking efforts, sharpening your skills or adding new
ones, and going back to school.
- Exercise, eat well, and get enough sleep. Strength and flexibility,
proper nourishment, and a good night’s sleep may increase your productivity
and help to keep your mind sharp.
- Be creditworthy. For tips on improving your credit and debt, see
Strategies #10 and #11.
- Prioritize, prioritize, prioritize. Making more money sounds great, but
at what expense? Take some time to get your priorities in order and find
the balance that works for you. Think about family, sleep, and mental
and physical health.
- Talk to someone. If your finances are causing you mental and/or emotional
stress — or distress — get help! A financial professional can help
you take control of your finances and map out a plan for you to succeed.
If financial concerns are only one of a number of issues causing you to
feel overwhelmed, speaking with a counselor or other mental health professional
can help lighten that load, which will make everything on your
plate more manageable.
