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    Targets: Aim, Fire

    “Listen to advice and accept instruction, that you may gain wisdom.” Proverbs 19:20 (ESV)

    Now, we are ready to go to work. How do we put this into action?

    The best way to learn “how” to reach for your dreams, goals, and targets is to study a live example and then practice in real life.

    So first, dream big. Dreams are healthy, fun, and sustaining. Bruce Wilkinson writes in his book The Dream Giver, “The better you understand the journey to your Dream and what God is doing in your life, the less likely you are to abandon your Dream.”

    Words for your dreams may sound like this: “I want to give crazy amounts of money away; for our children to grow wise, strong, experiencing a fulfilling purpose in life; and my spouse and I to walk well with God and each other, to be stable, and to enjoy some fun experiences.”

    Words like these are big and freeing, and they paint pictures on our heart and mind.

    Goals are the stepping stones to dreams and are a must in planning. Words for goals may sound something like this: “For my spouse and I to walk well with each other and be generous; we need to be financially stable in our current lifestyle.” “Our goal is to send our children to the best university that fits them, to flourish in their education, and to have the network and opportunities for the career that God leads them into.” “Our goal is to be financially independent one day, so we can serve in the areas of life that we are called to serve.”

    Targets are narrowing your goals into tasks, for you to work directly towards. They may sound like this: “We will set a budget for our current lifestyle and plan goals for the future raises we know we will experience.” “We will plan for our children to go to a Tier 1 university. As they grow, we can narrow this to the best choices for them and we will be financially prepared.” “We will plan for retirement at age 66 and grow our resources to that date. One of us will most likely have a second career, but we will plan for retirement as if we won’t.”

    To aim for these targets, we must be able to both measure where they are in the future and where you are today.

    Start with a budget. I know this sounds painful but it is imperative. The key purpose of a budget is to track and plan your income and expenses. There are many different ways to accomplish this. Today, we use technology that aggregates our financial account data into a preset budget tool that works within our financial planning technology. These tools make this basic process quick and easy. Tools like this are free or very inexpensive online, or can be offered by your financial advisor.

    Step two: target your highest priority. This may be debt repayment, college planning or retirement. For each one of these a specific plan should be set, assets set aside, steps designed to accomplish, then take disciplined action until this is accomplished.

    Typically, a budget and two targets are a good place to start. There is no universal law regarding this, so feel free to work this plan to fit you and your family.

    Once your first set of targets are on track, plan for income raises and how to reach future targets which will lead to your goals and dreams.

    At some point in the process a financial planner could be invaluable. A professional advisor with your best interest at heart can provide expertise, insight, and access to tools and skills you don’t have on your own. Search for a person who you can trust both their integrity and competence. Ask for recommendations from friends and for references from the advisor. Read what they write and teach. Ask them how they practice what they preach.

    One last thing. Relax, you are on your way….

    This blog is an excerpt from a book that the team at Sound Financial is in the process of writing, “Failure & Success, The Story of Money.” Look for it soon.

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    August 26, 2019 Market Outlook

    Risk, whipsaw, and the roller coast has certainly returned to the markets this month. At the end of July, the markets got a Fed rate cut, which it cheered. Then booed as many complained that the rate cut was not enough.

    (side note; our team didn’t think it was enough either!)

    Throughout the month, we saw ups and downs due primarily to headlines regarding the Trade War with China, the global economy, and our President’s tweets. Yet, what are we really watching, what does the data say, and how do we make decisions?

    This is why we chose a rules-based investment system year ago, for times like this. We do not want to be driven by our emotion and least of all by greed. These could lead us to run scared when we should hold tight or hold on to long trying to make too much.

    Therefore, this is what the data is telling us:

    Market Sentiment is negative and in a downward trend.

    Valuations are negative due to high valuations historically, meaning historically the stock market is expensive.

    Economic Activity is negative due to a slowing economy. The leading-economic-indicators are negative. This shows a slowing economy, but not necessarily a contracting economy.

    Federal Reserve Activity is positive due to their recent rate cut and future expected rate cuts.

    As for our over modeling (investment accounts), these have held up well this month. For a comparison of how your account has done, please call your Sound Financial Advisor. At the writing of this report, we expect our many of our accounts to trade to a “risk-off” position due to our credit spread signal. This is a core component of our rules-based models and is now signaling for us to move accounts more conservative.

    Admittedly the tough part of a rules-based modeling is following your rules without following your emotions. At times like these, anyone’s emotions get go all-over due to headlines and personal desires. This is why we built, tested, and implemented the rules, so that you can have the best models possible for your stage of life.

    We appreciate the trust that you put in us!

    Thank you,
    Chris

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