By Jeremy Wallace and Andrew Hart
If you have started planning for retirement, you know how confusing it can be. With hundreds of different financial instruments and securities to choose from and a convoluted tax code, it can be hard to know if you’re making the most out of your money. As complicated as the world of personal finance is, there are really only a couple of core principles that people need to stick to. As financial professionals, we’re used to giving advice, and if given the chance to teach only two financial lessons, here is what they would be:
Take Emotion Out of Investing
Have you ever been unable to make a decision because you were paralyzed with worry and anxiety about the future? Have you ever wreaked havoc on your budget for the momentary high of acquiring something you really wanted? These are all examples of how we let our emotions rule our daily decisions.
And unlike decisions about where to go for dinner, what we do with our money can have long-term consequences. For example, you are tempted by the “next greatest investment” that you can only be a part of if you rush to get on board. Or you panic during a market downturn and sell off stocks only to lose when the market eventually rebounds, throwing off your entire retirement plan.
Sticking to a long-term plan is a good way to help keep your emotions in check. A plan can ground you during times of stress and remind you of what’s really important when you’re not sure what to do. When creating a plan, keep your long-term goals in mind. What are your savings goals and how have you been working toward them? What is your investment plan and ideal asset allocation of your portfolio?
The answers to questions like these can provide long-term clarity during periods of short-term volatility and distress. The important thing is to stick to the plan when times get hard. Even though a plunging stock market is undoubtedly nerve-wracking, your plan will prevent you from making rash, emotionally based decisions. Don’t sell when markets get rocky, and remember that your long-term plan will last longer than a crisis-driven market.
Drown Out the Noise
We are bombarded with so much stimuli every day, from talking heads on TV to the constant dinging of our phones. Whether it’s business news or a family member who thinks they know everything about the stock market, information overload can be exhausting and make you doubt your actions and decisions. When you have a well-thought-out personalized plan, it’s easier to block out the noise and stay on track. So turn off your phone’s alerts and turn off the office TV stuck on CNBC. You will thank yourself later.
Partner With a Financial Professional
At Wallace Hart Capital Management, we are dedicated to creating a tailored financial plan that includes a strategy to protect your wealth during crashes. We will also be here every day to guide you through the ups and downs of the market so you can ignore the sensationalist headlines and invest without making emotional decisions. To get started on your journey to reaching your financial goals, contact us at 859.300.3030 or request an appointment online today!
Jeremy Wallace is founder and chief investment officer at Wallace Hart Capital Management, an independent financial services firm committed to offering comprehensive advice and customized services. Jeremy has 20 years of experience in the financial industry and is passionate about helping clients preserve and enhance their wealth so they can pursue their passions. Jeremy graduated from Emory University with a degree in international economics and a certificate in financial planning. Outside of the office, Jeremy spends most of his free time with his wife, Julie, and their three children, Isabel, Lincoln, and Reid. He is an avid Chicago Cubs baseball fan, and he enjoys golfing with his wife and traveling with his family. Learn more about Jeremy by connecting with him on LinkedIn.
Andrew Hart is co-founder and chief planning strategist at Wallace Hart Capital Management, an independent financial services firm committed to offering comprehensive advice and customized services. Andrew has 15 years of experience in the financial industry and strives to provide new and better strategies and processes to improve his clients’ lives. Andrew graduated from Wittenberg University with a bachelor’s degree in business management and holds a certificate in financial planning from Georgetown University and the CERTIFIED FINANCIAL PLANNER™ certification. When he’s not working, you can find him enjoying the city of Lexington, Kentucky, teaching at the University of Kentucky’s Financial Planning program, and spending time with his wife, Susan, twin sons, George and Ted, and daughters, Merritt and Philippa. To learn more about Andrew, connect with him on LinkedIn.