Each person is unique. We are composed of many variables, such as genetics, family influence, geographic influence and even the birth order among siblings – a veritable combination of the forces of biology and society. So when it comes to managing your finances, the debate isn’t about nature versus nurture; it’s both.
For example, consider two siblings raised in the same household: same socio-economic background, same parental influence, even the same level and type of education. Yet one sibling is a saver while the other is a spendthrift. Why is that?
We can’t always control whatever personal characteristics drive our needs, desires and indulgences, but we can learn to manage them responsibly. One way to pursue your financial goals is to work with an objective and knowledgeable financial advisor, a role we’re proud to fill for our clients. We can research and analyze your financial needs and objectives to help match appropriate investment and insurance products for your financial situation.
While self-knowledge is important, so is investor knowledge. Knowing how and where to invest isn’t an instinct we’re born with, but takes time and effort. If you’re wondering where you currently stand with financial literacy, consider taking the investor quiz at the Financial Industry Regulatory Authority (FINRA).
Investors tend to fall into various personality types. According to psychologists who study financial psychology, financial personality types can run the gamut from hoarder to social value spender to the ostrich (i.e., the proverbial “head in the sand”). To help counteract any obstacles that may be driven by your financial personality, one strategy is to focus on your goals. We may have very tangible components that influence our financial goals, such as the timeline for needing specific funds, the amount we’ll need and our personal tolerance for market risk. These three factors are instrumental in determining where and how to invest your money.
When it comes to investing with the goal of creating retirement income, designing your retirement plan may become even more complex. Not only should we take into consideration our household budget and all the travel, philanthropic and expensive items on our bucket list, but we also must weigh the potential impact of additional factors, such as:
- How long we expect to live
- How long we expect our spouse to live
- Whether or not our children or grandchildren might need financial help
- Whether we’ll experience significant health care expenses
- Whether we’ll need full- or part-time assistance as we age
The point is, even if we are natural savers, ongoing students of financial education, experienced investors or obsessive planners, there are still plenty of unknowns that can potentially knock us off course.
But the more we know, the better prepared we can be.
The content provided here is designed to provide general information on the subjects covered. It is not, however, intended to provide specific legal or tax advice. Contact us at firstname.lastname@example.org or call us at (952) 460-3260 to schedule a time to discuss your financial situation and the potential role of investments in your financial strategy.