At Premier, we understand that every individual has their own wealth management philosophy. After all, everyone needs to identify the financial strategies that work best for their unique situation.
Our team also understands the necessity of basing a wealth management philosophy on research, good advice, and quantitative evidence. We encourage our clients to educate themselves on schools of thought around finances, investing, retirement, and researching your wealth planning options. That way, when you work with a trusted advisor you can make fully informed financial decisions.
That said, even when you've already put in the legwork and developed your own set of financial philosophies and priorities, it's key to remain flexible and keep an open mind. Remaining open to new ideas and being willing to change your wealth management approach if necessary may increase your chances of achieving the financial future you desire.
Your Financial Strategies: Are They Evolving?
When you're first identifying the strategic financial planning steps that work best for you, it makes sense to allow your financial philosophies and approach to evolve naturally. For many, this means learning the importance of budgeting, saving, and avoid debt whenever possible.
Over time, the importance of investing — and the "magical" tool of compound interest — becomes clear. Along with this enhanced understanding comes the realization that there's no one size fits all, cookie cutter approach to investing. What works for someone else may or may not work for you. When you realize that other people's financial choices don't have to guide your own, the need to determine what's most important to you comes into focus.
Rather than following a friend or family member's financial strategies (or following the advice of personalities in the financial media), your own priorities and goals should guide your wealth strategies. You don't have the same financial situation as others, so why should your financial plan be the same? While you can learn from others' choices, failures and successes, identifying your own priorities and fine-tuning those lessons to fit your own path is key. That's where being open to new financial ideas comes in.
Is Flexibility Part of Your Comprehensive Financial Plan?
Often, the most difficult part of allowing your financial strategies to evolve is letting go of the ideas and approaches that don't work. For instance, if you follow the financial media, you've probably noticed that many so-called "experts" or "gurus" push the idea of stock picking, or timing the market. While this practice is definitely presented as exciting, in reality, years of quantitative research proves that the active investment approach is not an effective strategy. This is a clear example of the need to let go of ineffective advice and go your own way.
Another example? The rent-vs-own dilemma. Though conventional wisdom usually tells us that it's always better to buy than rent, in some cases renting just makes more sense. Letting go of ideas and advice that may work for some, but not for you, is an essential component in an evolving financial approach that helps you get where you want to be.
While you may feel embarrassed to backtrack on financial approaches you've outspokenly championed in the past, flexibility is a valuable asset. Take time to meet with a trusted wealth advisor to ensure that your financial and investment philosophies are truly working for you.