Protected from the Storm: How to weather any economic crisis
How would it feel to know that you are protected, no matter if the economy tanks, stocks plumet, and housing prices downturn?
How would it feel to have confidence that you will have financial security no matter what happens in the economy, stock market, or with real estate prices? Could it provide the peace of mind that you might be seeking? Could it possibly allow us to cast aside our fears and live presently and calmly in the present moment? Let's explore methods that could guide us to this euphoria and help cope with the world of financial volatility we find ourselves in.
- Define what financial stability means to you. Each of us has different income needs, cash needs, long-term financial needs, and charitable desires. You may also wish to provide for others while you are alive and after your death. The first step is to determine the amounts that need to be allocated for each of your requirements and wants. Financial stability also involves knowing what your risk tolerance is and how comfortable you are as an investor. Investments must match your risk tolerance for you to feel confident in yourself. These are all parts of a solid financial plan; it's essential that you consider each one as you develop the plan.
- Describe your current situation. All progress begins with an accurate assessment of the numbers in your current financial status. Most of us avoid this because we either don’t know where to start or it feels overwhelming. If we don’t take time to really understand our current financial situation, we can't set the plan in motion to pursue financial stability. In our minds, we tend to either understate or overstate our current situation. Once you face it and put it down on paper, then you can create specific actions to pursue financial stability. It's empowering once you have this knowledge and develop and implement your plan. It may not happen overnight but by diligently following through on your plan over a long period of time, you'll make great progress towards achieving your desired outcomes."
- Stick to the facts. When problems or unexpected turbulence arise, stick to the facts and be cautious of opinions and assumptions, including your own. Market corrections are as constant as the changing seasons. It can feel like we are going to be in this bear market for a while with stubbornly high inflation, geopolitical tensions, and gas prices at all-time highs. When we give our energy to things outside of our control, it usually creates worry, stress and anxiety. This is the opposite of what we desire. Understanding the facts brings to light what is happening and often alleviates concerns. It allows us to look at things objectively instead of emotionally or frantically then take appropriate actions when that's possible.
- Strive to feel at peace. Financial stability is not just about money; it's also a state of mind. To have peace of mind does not mean that you don't react to external events, as we all do, but it does mean that you don't allow fear to take over and shake your confidence. When others are fearful, you can stay calm in the storm. A way to remain calm is to have and stay committed to a financial plan which includes investments that match your risk tolerance. Everyone is different and it's essential for everyone to have a strategy tailored for their specific situation. Having confidence in your plan can positively shape your outlook; knowing that it was designed with periods of volatility in mind.
- Team up. It's hard to do it alone. Ask yourself the following: who can I trust to collaborate or partner with, what are my resources when I'm feeling stressed and worried, and who can help me see the situation in a different way. An experienced financial advisor often helps you think objectively, cut through the noise of social media and news, and guide you back to what's important for your unique financial plan. The more resources available to help guide you, the more confident you will feel when problems arise.
I hope that you will challenge your doubts and fears and seek financial stability. Don't make decisions that go against your long-term best interest because of emotional factors. Instead, ensure that your plan can withstand volatility, and then stick to it.
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Forbes, Financial Freedom Wealth Management Group and LPL Financial are separate companies.