Local financial experts give tips for monitoring your wealth in 2021
It’s not the first time in history we’ve had to face a crisis, but 2020 has been a year of financial uncertainty, with everything from the pandemic and civil unrest to the election and the economy. As we look to the year ahead, investors will again take the time to reflect on important monetary aspects like how to control spending, saving and other ways they can continue to build wealth. We spoke with several local financial experts who shared some of their top Do’s and Don’ts during this time of uncertainty.
John VanWeelden, president of VanWeelden Financial Group
- Think long term. Investment strategies should be evaluated on no less than a full market cycle. Decisions should not be based on quarterly or even annual performance.
- Use common sense. Most of what your grandparents taught you about money is probably true, regardless of what you hear from the popular financial media.
- Minimize debt. Despite record low interest rates, the borrower is still slave to the lender. In the end, less debt is usually better than more debt, and no debt is best of all.
- Don’t chase returns. Large losses hurt portfolio performance far more than short-term gains help.
- Don’t believe everything you hear in the financial media. See the No. 2 “Do” above.
- Don’t compare yourself to others. Everyone’s situation is unique, so there’s no one formula for long-term success. Develop a plan, stick to it, and don’t worry about what everyone else is doing.
Jason Katz, wealth advisor and principal of Bartlett Wealth Management
- Make your financial plan a priority. If you wait for the “right time” to start the process of creating and executing a plan for your financial future, you might just be waiting forever.
- Seek out a fee-only adviser that focuses on serving you as opposed to selling products. Fee-only advisers have your best interests at heart, not selling you a product that earns them a higher commission.
- Craft your plan according to your values and vision for your family. Each financial plan needs to take into consideration who it is for, and what the overall goals for your wealth are.
- Involve your family in the financial planning process. Ensuring that a financial plan works for all parties is imperative to its success. Even kids can benefit from age-appropriate involvement, as it helps show them that building savings is important and a process.
- Revisit the financial plan often as life and goals change over time. Sometimes the goals and vision we set for ourselves can and need to change as our lives change. Regularly reviewing plans and ensuring they still line up with where you want or need to be is imperative to your long-term success.
- Don’t select an investment product; instead, select an investment adviser. A trustworthy adviser with your best interest at heart is one of the best ways you can ensure your financial plan will be set up to keep you at the center.
- Don’t overspend. A comprehensive financial plan will guide you as to the guardrails of your spending. Without one, you are left in the dark.
- Don’t buy and sell stocks based on emotions or the 24-hour news cycle. It’s hard not to see headlines and panic about what it might mean for your financial future, but it’s been proven that riding out the waves in the market is a better strategy than trying to time buying and selling to take advantage of short-term feelings.
- Don’t try to time the market. “Time in” the market is a much more successful strategy than “timing” the market, which involves predicting short-term swings.