GET YOUR FINANCIAL HOUSE IN ORDER

​It was a great week in our office with my son Jared, and son-in-law Jason, both passing their CFP® exams. Apart from all the pre-requisite educational and experience requirements, they both studied almost every day for over a year to prepare for the very difficult test. You can imagine the celebration when they both passed, and the relief felt by their patient wives.
 
As we discussed their accomplishment, one asked what I recommended as the next step in their journey to becoming the best they could be in the financial planning world. My answer to that question comes from my own experience in the industry. I’ve always been fascinated with investing. Perhaps that began early on when my dad first taught me about making money. He said you can either spend your whole life working for money, or you can learn to let money work for you. I liked the sound of that second option and so I set out to do my own investing. I quickly learned that not only can money work for you, but it can work against you if you don’t invest it wisely.
 
As the years went by, I began to learn the value of “time” in investing. Good and bad economies come and go but the person with time to ride them out seemed to do much better. Impatient investors often found markets unforgiving but patient ones were able to benefit from the up and down cycles. The challenge was surviving the bad times. Thus, came my answer to the question. I told my boys that in order to be a good financial advisor, they had to first be financially sound themselves. If bad times came (and they always do) a person who has too much debt or lacks adequate financial reserves to weather the storm, will experience stress and fear. With those emotions come bad decision making. It is also impossible to give calm advice to others in a time of stress, if you are personally afraid for your own survival.
 
I offer the same advice to everyone I teach about investing. Making money in good times is great, but if you have too much debt or if you lack the financial resources to survive a personal disaster or a long economic downturn, a bad situation can quickly erase all you have worked for. And you certainly can’t help another if you are sinking yourself.
 
The coming years will certainly bring more economic volatility. Just as there have been dark days in the past, there will be dark days to come. It is the nature of life. There will also be many times of bounty and opportunity. Prepare for the storms by getting your own house in order, and don’t delay. Then you will be in a position to not only survive the bad times, but to enjoy and benefit from the good ones.