Throughout January, the cartoonists, pundits and fate-followers have poked their usual fun at the tradition of making New Year resolutions
. Despite all the ribbing, I have found they are quite useful in establishing a foundation of visions, dreams and goals for the year ahead and where I fell short in the year departed. Call them a poor man’s business plan if you will, but I believe a man is as he thinks. Therefore, with all this ribbing comes a custom that can be highly worthwhile, for it involves a sober and analytical review of past attitudes, habits and biases in an effort to determine those we should correct.
This process should include a review of savings and investment attitudes and habits, whether as a consumer or an advisor. Let’s
suggest three resolutions that constitute a fundamental savings and investment philosophy without the inherent tendency to forecast by the crystal ball and eat glass when we do this again next year. These resolutions are based on observations of thousands of advisors and consumers over the years and the reasons for their successes and failures.
1. Resolve to pay no attention to your own or anyone else's guesses concerning what the markets are going to do over the next several weeks or months. Don't follow the herd mentality
of chasing what everyone else is doing or the deer in the headlights mentality of doing nothing but burying Benjamins under the bed.
2. Resolve to diversify
your savings and investments with the principal emphasis on those sectors and asset classes that provide true
diversification along with maintaining the potential for return of principal, return on principal, a lifetime income, and tax advantages based on suitability and to stick to this plan as much as possible.
3. Resolve to think of yourself as part owner of the savings vehicle or investment and keeping up with its performance, rather than merely buying an intangible and hoping you can sell it at a higher price later on. This involves checking under the hood through regular reviews with your advisor, as well as looking inside the can of sardines before you buy, despite the pretty packaging.
4. Resolve to use social media as an integral part of your practice and use it to supplement your website, seminars, client events and direct mail programs actively by joining and participating in the groups that my prospects, clients and other centers of influence participate in. Embrace technology rather than run from it.