|Were you prepared for this frustrating time of inflation?|
You’re not alone in wishing your investments and business were more solidified in the tumultuous times we find ourselves in. Many of us are still wondering how best to prepare or even wondering if it’s too late!
The good news is that these uncertain times create TREMENDOUS OPPORTUNITIES for those who plan ahead. The following tips work with any asset, including stocks, bonds, real estate, metals, CD’s or cash. (And YES, cash is an investment.)
Two years ago, I came up with Ten Tips in regards to the planning for the pandemic, but it’s evident these tips are timeless.
|Here’s how you can find clarity during the chaos and get your investments on the right track:|
Tip #1: Take Inventory
Take inventory and diagnose your current financial situation by creating a spreadsheet (or a sheet of paper) listing all assets and liabilities.
Confront the facts impartially. In order to know how to get where you are going, you need to know where you are.
Tip #2: Goal Setting 101
Where do you want to be? Remember the story of Alice in Wonderland? One day Alice came to a fork in the road and saw a Cheshire cat in a tree. “Which road do I take?” she asked. The cat Asked Alice: “Where do you want to go?” “I don’t know,” Alice responded.“
Then,” smiled the cat, “It doesn’t matter much.”
Don’t be Alice. You have to have a plan and set goals to get yourself to where you want to be. Your investments should be a direct reflection of your goals.
For example, if it’s cash flow you desire, invest in things that pay monthly or quarterly cash distributions while not affecting the principal adversely. A classic mistake made by both financial advisors and individual investors is using an account or strategy meant for speculation (i.e.: buying low in the hopes to sell high) and utilizing it for income.
Tip #3: Start From Zero
The fastest path to prosperity and building wealth is to approach everything as if you were starting from zero.
Ask yourself these four questions:
A. Would I buy this asset today at this price?
B. Are the prospects for this investment good? If so, how good and in what timeframe?
C. What is my exit strategy?
D. If I could use this capital for anything, is this what I would be doing?
Should any of the above be unclear, go back to Tip #2.
Stay tuned! In future posts, we’ll cover more tips on how you can adjust your portfolio in the midst of a pandemic and beyond!
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