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Understanding Your Financial Position

Do you feel confused about your monthly investment statements? Do you understand the words that come out of your advisors mouth? Are you worried about if you'll have enough to retire? Does this sound like a Pepto-Bismol commercial?

Confusion. I find that as I meet with people week after week, the main theme is confusion. I thought this month, let's take a look at this complexity filled issue and break it down to try to make it easier for you to deal with your finances while dealing with the stresses and roadblocks of everyday life. Whew... just writing it makes me confused! The first place to start, before all the paper and mail and conversations with your advisor (you DO have an advisor, don't you?) is to look at your goals and objectives as to why you are saving. Not unlike setting out on a road trip, you have to first determine where you are going before your set out. Clearly if you don't, you will never get there, because you don't know where you are going. If driving around aimlessly until you run out of gas is your thing, have at it. The end result as we all know, is exactly that- you'll run out of gas eventually and not get anywhere. Is your road trip similar to your financial plan? Anything in life that you ascribe to achieving would usually be the result of a carefully crafted plan to completion. Financial planning is not much different than building a house for example: first comes the blueprints, materials list, finding the right contractors and people who are experienced in the field of expertise you need, etc. Well, in financial planning the same is true. A financial roadmap needs to be drawn to ascertain your goals, and how to achieve them. Not unlike a road trip where detours are sometimes necessary, so are the changes in life- you have to go with the flow and adjust when necessary.

Find an advisor. You've heard me advocate seeking out a Certified Financial Planner™ (CFP®) for as many years as you've been reading my ramblings. A CFP® is trained to deal with the complexities of the financial world, and completes 30 hours of continuing education every two years- or they lose their certification. Anyone can call themselves a financial planner, investment advisor, consultant or wizard…it's the certification and continuing education that counts- to show that they have studied their craft and achieved certification of the expertise you so dearly need to help guide you. To be sure, you need to be personally comfortable with your planner, but at least you'll know they have the educational backround you need to help you through. Don't let your ego get in the way- you don’t fill your own cavities... you go to the dentist. You don't (or shouldn't) do your own taxes- you go to your accountant. So what makes you qualified to manage your own money?

Open your statements. They're not sent to you to accumulate to start the fireplace or make sure the shredder is working. They are an informant of your financial position and it is crucial that you both read and understand them. If you are confused... ask for help. This is your money, your future- if you don't pay attention to your financial standing, don't blame anyone but yourself if you don't achieve your goals. Economics are an ever-changing entity, and sometimes you have to adjust for them. Ask questions, and schedule reviews with your advisor. No questions are silly or stupid... only neglecting to ask them is. So, set your goals, get into a regular savings plan, find the right advisor to walk along with you on your journey, keep up on what's happening, and go for it! Remember- it's your future... who's got more stake in it than you?

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