“If you fail to plan, you are planning to fail” Benjamin Franklin (Founding Father of the United States)
Says the incoming prospect:
“I’m hiring you to consistently pick the top performing stocks, funds, crypto-currencies, or whatever else is making the top headlines on my favorite news channel. And, on top of that, I’m going to need you to get me out of the market at the precise moment before it tanks. And once the aforementioned tanking is done, I will need you to get me back into the market at the fulcrum of the exact bottom. Any questions?”
“Nice to meet you. Buh Bye!”
All good wealth compounding starts with a plan. If you start with a desire to ‘outperform’ this or that, you’ve missed the point. The proper question is, “Where am I going?” Followed by, “And how do I get there?” Like opening the Maps app on your phone, a Financial Advisor sits ready to assist you in answering those 2 questions. And then, only upon figuring our where you’re going, does the good Advisor recommend investments to help get you there.
Says the client:
“Tell me again why I’m paying you all this money to underperform the S&P 500?”
Says the Financial Advisor:
“The S&P 500 isn’t my standard. Your plan is. And, as we sit here today, your prudently diversified portfolio which we carefully constructed to help you reach your financial goals, is on track. Should any deviation from said plan occur, it is far more likely it is because you’ve deviated from our well-crafted roadmap that was presented to you at the beginning of our relationship. Your savings rate, disciplined approach and trust in your Financial Advisor far outweighs your concerns about the S&P 500. You must know this…and believe it to be so.”
The next decision the client makes is the crux of it all. Chase performance, or follow the plan. One path leads to almost assuredly capital destruction. The other path, to financial independence.
I’m blessed to have clients that follow the plan…through thick and thin. They’ve saved well, they’ve utilized a disciplined investment approach, and trusted our firm to help steward their plan along the way.
Many have reached financial independence, many are on the path to do so…and so can you. Don’t be swayed by the latest and greatest performance promises. Develop a plan. Hire an Advisor to help. Stay disciplined. Trust the process.