You may be surprised the next time you log-in and view your various investment account values.  It’s likely that the accounts have rebounded from declines seen over the past several months.  This is good news to the patient, disciplined, goal-focused investor who didn’t flinch when it looked like the world was going to end. Those who had a written plan, based on concrete goals, have been rewarded for their prior planning and steadfastness.

So how did they do it?  What makes their approach work?  How do you go about creating a plan to guide better decision-making?

The recipe for planning success begins by addressing a current challenge or question.  At some point, in the past or perhaps now, you’ve found yourself dealing with a financial, life planning, or money-related issue that is, or has caused you (and/or your family) some pain.  It may come in the form of reacting to a decision someone else made that now impacts you.  It may be preparing to make a big decision that has significant life and financial ramifications.  You may be at a crossroads with various choices in front of you.  It could be that you have an an uncomfortable feeling, or lack of clarity, as it relates to your financial future.  Often, it’s a combination of all these things that ultimately reaches a tipping point.  And that tipping point causes you to seek solutions and take some sort of action.

“Perhaps I/we should get some advice about _______?”  It’s here, in this simple question, that future growth and possibilities may be found through creating a financial plan.  Having self-awareness and the willingness to seek a second opinion is unique and does not come naturally to us.  Asking for help may seem like defeat or that we’re giving up control.  No one really wants to admit they don’t have all the answers.  Washington DC, Virginia, and Maryland are all overflowing with uber smart, informed, successful professionals and families at the top of their game.  Surely everyone has it figured out and doesn’t need help, right?

Here’s what I’ve learned in two and half decades of financial planning:  Most folks reach out to our firm with a concern that’s immediate and requires attention NOW.  They seek an understanding of various factors (some in and out of their control) so they can make better decision TODAY.  Once this pain point is addressed, options are evaluated, decisions made, families and professionals feel relieved with the initial problem solved.  This allows them to get back to life and doing what they do best.

Most decisions cannot be addressed in a bubble.  By asking thoughtful questions, listening, and clarifying concerns – we can learn more.  This also creates mutual trust in one another.  Those who are willing to share what’s troubling them tend to stand the best chance of laying the groundwork that builds a financial plan.  The framework of the plan begins by addressing the original challenge, or question, that prompted them to reach out.  From there this question led to a conversation around values, priorities, loved ones, and other factors that made it possible for a plan to take shape.

Nobody ever wakes up in the morning and says, “today is the day I will create my comprehensive financial and life plan”.  It doesn’t happen like that.  What does happen is life plays out and we are presented with unforeseen challenges.  Developing an understanding that life will always present us with unexpected challenges, and then being prepared for them, is a game-changer.

Without a written, goal-based plan, all you have are investments.  This leads to the typical, singular view of them being either up or down at any given moment.  You view your success simply based on outputs that are largely out of your control.  When your outputs shrink, as they did over the past several months – you react, and the impact is felt.  Putting time and energy into how investments perform (or don’t) in the short and long term is not a plan.  Only when you realize this and shift your perspective beyond results, to more meaningful and lasting goals, does a plan start to take shape.

You may have a question or challenge you are facing now.  If so, we’d like to help you.  The best way to do so is to contact us here.

Diversification and asset allocation strategies do not assure profit or protect against loss. Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including loss of principal.