It has been said that change is the only constant in life. So true. About 33 years ago I started my financial practice. It has been an amazing ride with significant changes! Rather than recounting all the changes and sounding like an old-timer, let's review a few things that have not changed.
First, the key to financial success, still the same after all these years: Spend less than you earn and do it for a long time. Still easy to say and difficult to do. There are new technologies today that can help us with the main discipline of paying ourselves first. This can help ease the difficulty a bit. The general consensus is that we should capture about 15% for our long-term savings. This may vary depending on your financial goals.
Second, compounding is still the eighth wonder of the world. When your money starts making more money the cumulative effect is so powerful. When time and money come together they can create quite a dance. Start early and save often.
Third, capital markets still go up and down. This will always be a constant because of our nature. The only cure for a bear market is buying. Eventually prices get so undervalued that bargain hunters begin buying and the next bull market is born. It has been amazing to watch 7-8 of these cycles during my career. These cycles will continue as long as human nature is involved.
Fourth, contrarian thinking is always wise. This is my best investment advice. It's like how you know if you have a great friend, "They walk in when all others are walking out." With investments, buy when all others are selling and sell when all others are buying.
Fifth, insurance is still a lifesaver. So many times I have been at a table with families after a tragedy. Insurance has often been the difference maker to their future. Managing risk in a financial plan will always be crucial.
There are probably a few others that should make my list, but these are the main ones. If you are a client of our firm, thank you for your business! If you are not a client, we would enjoy having a conversation about your financial dreams!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
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