How to make a finance action plan for 2019

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Information from Sutton Financial Group:

Congratulations! You have made it through the holidays, considered your New Year’s Resolutions (that you’ll work on for probably the next ten days and then back to old habits, right?) and went back to work. Yippee. Josh Billings said, “Life is short, but it’s long enough to ruin any man who wants to be ruined.”

Of course, nobody wakes up January 1st and says, “I want to be ruined this year,” but the road we choose to be on determines our destination. Habits, thoughts, and actions will inevitably lead us to wealth and comfort or debt and high blood pressure or depression, according to a recent psychological study. In contrast, though, Billy Graham said, “I’ve read the last page of the Bible, it’s going to turn out alright.”

So, what are some actions you can take right now to detour on to a better road? Let’s talk about a few.

REBALANCE YOUR INVESTMENTS. When I say rebalance, I mean the weightings or percentage of your investment portfolio in asset classes such stocks and bonds. Additionally, consider categories you’re currently under/over exposed to like US stocks versus foreign stocks, or corporate bonds versus government bonds. Due to the long bull market we have enjoyed in prices of US stocks/equities, or due to the volatility of the market in 2018, your portfolio is likely out of kilter from where you started last year. You can restore your target weightings in asset classes to reflect your investment plan by selling securities where you are now overweighted and reallocating the proceeds. Another option is to simply contribute more into areas that have fallen below target allocations. A third option, is to proactively contact your financial planner to work together to get it reviewed and reallocated.

REVIEW YOUR INVESTMENT PLAN. What if you’ve grown more conservative as you have aged? What if you have decided to work longer and so your time horizon for your retirement account has increased? What if you have changed jobs, married, or recently had a child or grandchild? All of these and more will have an impact on your investment plan. It is time to determine what that plan looks like. It might require you to shift more money into longer term investments like real estate or stocks. Maybe it requires you to be safer with your money, either way, determine the new investment plan and make the appropriate changes on your own or with a trusted advisor.

REVIEW/UPDATE YOUR BENEFICIARIES. Since beneficiaries written down on your life insurance policies or retirement accounts typically trump your will, it would be a good idea to review WHO you currently have on file to receive your money when you die. The classic example is the gentleman in New York years ago whose wife of decades passed away leaving behind a million dollars in her 401k. The wife had opened her 401k before she was married and never reviewed or changed the beneficiary, assuming her will would take care of things. Well, her sister was pleasantly surprised to receive a million dollars which she decided to keep, of course, in spite of the howling of her super angry sister’s widower.

REVIEW/UPDATE YOUR WILL AND END-OF-LIFE DOCUMENTS. Along with reviewing your beneficiaries is to review your will, your health care proxies, and financial power of attorneys. These documents, though morbid to consider, will make life so much easier for your loved ones if you die or are incapacitated. Speak with an attorney, or find a trustworthy legal consultant on the internet to assist in the review or creation of these important documents.

Only you can make these things happen. Remember, hard work is the soundest investment. It provides a great retirement for your widow’s next husband.