One of the characteristics of successful investors is the ability to stay focused on their financial goals and objectives. That is, both in bad economic times and in good ones.
You can have any number of goals, from funding your child’s education to buying a home or simply building a nest egg that can bring in enough income after retirement. Whatever the measurable goal, you need to anticipate the unexpected and be prepared for adjustment.
In most cases, something like job loss or illness is unexpected. We all certainly got an unexpected boost when Russia recently invaded Ukraine. People who live from salary to salary will fight the most. And immediately after them are those whom I call financial drifts.
By financial tramp I mean a person who has a sufficient income but tends to spend a lot and lead a life beyond their means. Rarely do they save money for a rainy day.
One who has a measurable goal needs to be shrewd enough to make minor adjustments to their lifestyle. Otherwise, they may not have enough money to achieve their financial goals.
That means spending a little less here and there to make sure there’s money left for a monthly contribution to the college’s savings fund. Or enough to set aside to pay by credit card, which is likely to be higher due to rising food prices and the cost of gas at the pump.
People who ignore economic realities and continue to spend as if nothing has changed may wake up one day and really stand behind the financial eight. The way behind.
Without a doubt, prices are rising in all areas of our economy, from gas to groceries and equipment to home appliances and especially to new and used cars and rentals. And all this is happening while the economy is relatively strong.
I wouldn’t be surprised if soon we hear the term stagflation. We already have one component: inflation. But when the economy slows, higher prices and dimer demand prevail, it’s stagflation.
And in this geopolitical situation, when countries impose sanctions on Russia, I will not be surprised if the economy slows down a bit. Remember that Russia is not just a gas station, it’s more like that
supermarket goods. Our shortage of some vital goods can easily slow everything down here at home.
Now is not the time for significant changes in your portfolio. More often than not, when you make changes in troubled times, you allow emotions to take control of your finances. This rarely works in the long run.
That said, this is a good time to reconsider your expenses. If you can, make small adjustments. It looks like a lot of people are already doing this because Wal-Mart recently reported that they see an increase in purchases from consumers at the top of the income scale. Everyone is looking for benefits.
With rising interest rates at home and rising tensions in Ukraine, we are now in a difficult position. From an investor’s perspective, you need to stay focused on your goals and grind them out. Keep a close eye on your cash flow. The crisis in Ukraine is a financial storm, but in the end the sun is shining again.
Securities offered through LPL Financial, a member of FINRA / SIPC. Send your questions to email@example.com. Ken is a registered representative of LPL Financial. Ken is the vice president of the Society for Life Planning. All opinions expressed belong to Ken Morris. LPL and the Society for Lifetime Planning are independent companies. Investing involves risk, including loss of principal. No strategy guarantees success and does not protect against losses.