Core Principle Series – Principle #7
‘Fail to plan – Plan to fail’
This principle is crucial for your own protection. If you read through the three scenarios that I posted earlier, you will have noted that each of them had some money, knew it needed to be invested, and wanted to be smart about what they were doing but ultimately didn’t accomplish their objective.
The very first question that you must ask yourself regarding an investment is “Why are you investing?”. No – really. What are you wanting this money that you are putting aside to do? Is this retirement money? Is it rainy day money? Is it for a big vacation you’re hoping to take three years from now?
You see the answer to those questions frame the investment structure. Planning means that you need to think about the what and the why and then add the time duration that you have to operate in. That may sound a little confusing but think about it this way; money that you are saving for a rainy day in an unknown time horizon would be invested differently than money for retirement where you don’t expect to touch it for 10 years.
Don’t get swept away with how good something sounds – always start with your plan first. Why are you investing? What do you need the money to do and in what time frame? With that plan in mind, you’ll always make better decisions.
I’d love to help you with that process. Reach out to me at firstname.lastname@example.org and let’s talk. Next we’ll talk about principle #8