Since it’s spooky season, and given that Halloween is only a couple of sleeps away, I thought I would touch upon some of the common “scary” concerns that I hear from clients. When I asked my network to reflect on what “scared” them most when it comes to their wealth, a few interesting concerns came to light.
The first concern that came up was attempting to navigate the balance between enjoying your wealth now and saving for the future. I admit that is a tricky balance to wade through, but I think the keyword is definitely “balance.” I believe that you should enjoy now while also tucking some aside for the future. There are plenty of ways to enjoy life now, while being mindful of cost-effectiveness, to ensure that the ability to save remains available. I encourage all my clients to save as soon as they get their pay and then enjoy the remaining amount as they see fit. This practice ensures saving is a priority, and you can enjoy spending… guilt-free!
The second was worrying and/or realizing that there is not enough saved for retirement. I believe this to be a concern that a vast majority of people have. This can be managed by having a plan in place to achieve that retirement goal. I encourage my clients to put away what their monthly budget will allow throughout their 30’s. This is often a costly decade so being in the habit of saving each paycheck, even a little, is a fantastic foundation for any retirement plan. As clients get into their 40’s, we sit down and map out their retirement goals and ideas – with their foundation established, and a plan laid out, the execution becomes the final step in their path to saving success!
The final concern was losing all the money they have saved. There are a few ways to mitigate this concern. The first is to understand your appetite for risk. Everyone is okay with gaining money – but being able to acknowledge how you truly feel about losing money – followed by having an open discussion with your Advisor – is essential to building a portfolio that allows you to sleep at night! The second is to have a well-diversified portfolio. This includes being in different geographical locations, various sectors and diverse financial instruments to mitigate any one risk. If one sector or one country experiences some trouble, other areas of a well-balanced portfolio can support your investment. We saw this recently with China’s commercial real estate crisis – the rest of the world barely felt a blip, whereas the Chinese market was down significantly.
I hope by acknowledging some of these concerns, I gave you insight into how I coach and support my clients through them. Achieving balance, saving first, and maintaining a well-diversified portfolio are each essential in the wealth-building process. By combining and prioritizing them, mitigating wealth concerns can be achieved, and finances can flourish.
