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Do you have a plan? October 6, 2008

Posted by shaferfinancial in Uncategorized.
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Dave, I have a plan it just isn’t working!  That is what a reader said to me this weekend.  So I asked a few questions.  What is the plan?  What are your goals?  What rate of return do you need to reach your goals?

The plan is a buy and hold strategy with mutual funds using dollar cost averaging and a 3% company match.

The goal is to retire comfortably.

He guessed around 10% rate of return.

The problem is his “plan” is not a plan but an investment strategy.  This led to an undefined goal and no clue how much of a rate of return he needed.

Let me repeat again, a plan is very different than an investment strategy.  What makes up a plan?

First you have to know exactly where you are now.  Then you have to decide exactly where you want to be and how long you have in order to get there.  Then you can come up with a rate of return on your capital that you need to obtain.  When you have these numbers, and only when you have these numbers, are you ready to start building the plan and deciding on the investment strategy.  Wall Street has taught people to do it backwards.  How can you decide on an investment strategy before you know what you need to accomplish?

If you have an investment strategy without a fully designed plan, your chances of success are slim.  How can you know if you are making appropriate progress without a plan?

The last decade has not been nice to people without a plan.  It certainly has not been nice to people with only an invest in mutual funds investment strategy.  Can you design a plan on your own?  Certainly.  But will you?  Most people will not take the time it takes even when they tell themselves they really need to do it.  Its like losing those extra pounds.  You know you need to do it, but life intervenes and it never gets done (you need a plan for that too!).

Let me be direct with you.  If you haven’t created a plan by now, the chances of you doing it without outside influence is low.  If you don’t have a plan you will probably fail to reach your goals.  I will help you design that plan, get you psychologically attuned to implement the plan, and coach you as your plan is put into practice.  You will reach your goals with my help.  Is this worth $1950?  What is the cost of failure? Contact me now at dave@shaferwealthacademy.com or 727.804.9271!

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