We live in a world of abundant consumer choices, which can be empowering but at the same time confusing and frustrating. Investing is no different. With thousands of investment choices, advisors, TV shows, mobile apps and news headlines – how can anyone make sense of the jargon and competing messages?
In the coming months, I’d like to share a few fundamental principles that every investor will find helpful. These principles will cut through some of the noise and help you better understand the seemingly complex world of investing.
Investing Principle #1
Planning is the foundation of investing.
To quote Benjamin Franklin, “If you fail to plan, you are planning to fail.” Planning is the foundation of investing. Many think investing is only about making smart investments and getting good returns, but it is critical to have a plan in place to understand why you are investing.
Are you investing for retirement, a house, education, charitable donation or a family legacy? How do your values, needs, concerns and hopes factor into your plan? How often should the plan be monitored or changed? How do you know if you are on track to meet your goals? With a good plan in place, all of these questions will be answered. Your plan will help you navigate efficiently towards your goal (especially when life throws you a curve ball) and prevent you from blindly going about your financial life hoping to arrive at your destination.
Look for the second principle next month!