You’d think there’d be an easy answer to that question. I’ve heard it so many times. But it’s always a challenge. And that’s exactly how it should be.
For one thing, this one question triggers so many others.
What does the client earn?
What is their lifestyle?
What are their attitudes about money?
What is the long-term plan?
Are they sending kids to college?
And so on.
If we want to make a truly informed investment, these and other question need to be answered.
But let’s say you cashed in some stock options and after taxes you have about $100,000 to invest. That’s great. But what do you do?
I could sit down with 50 clients today and come up with 50 different answers. We’re fortunate to have choices. But still, it’s easy to get overwhelmed.
Few things are as important as how you take care of you money. Here are some recommendations that can help.
1. Resist the temptation to invest the money on your own. With investing you need to be detached, balanced, and disciplined. Find a competent advisor who can help you keep this up.
2. Ask questions. Not only should you be willing to learn from your advisor, but you should keep seeking answers until you are entirely comfortable. Educate yourself as much as you can. As any good teacher will tell you, there are no stupid questions.
3. Avoid paralysis by analysis. Do the work. Be objective. Be thorough. But make a decision. Move things along. Live your life.
4. Keep the big picture in sight. Understand your comprehensive financial plan. And make it stronger by choosing investments that are consistent with it.
Listen to Stu and Win Damon chat about this topic on wnbp AM 1450 Newburyport
9 March 2012