Before April showers and May flowers (and whatever else comes next), there’s madness in the air. We all love the sweet taste of a bracket upset, the friendly competition between rivals, the hope of it finally being your team’s year to make it all the way…
Now, what does all this have to do with your financial independence? When you think about the greatest basketball teams, they rely on strategy, patience, and dedication to succeed – just like you have to in your journey toward financial independence!
But, while buzzer beaters might be exciting on the court, you don’t want to have to rely on them for something as critical as maintaining financial independence through retirement. So, the real question is… do you have a game plan? If not, here’s a good start:
Play Defense
A good defense is just as important as a good offense. For your money, playing defense means protecting your investments from potential losses. One way to help do this is to diversify your portfolio.
You can diversify by investing in a mix of stocks, bonds, and other assets. This can help spread your risk and minimize the impact of any single investment’s performance. Many often recommend specific percentages en masse, but let me be clear: blanket statements aren’t good enough for you. Your neighbor, your uncle, your coworker… their goals are not the same as yours. That means you’ll each have different objectives and different willingness to accept risk.
Diversification can also come into play in terms of timing. Your age, circumstances, and goals can help you determine which type of investment is best for you. If you’re saving for financial independence in retirement, that may be utilizing something like an IRA, but if you’re saving to start a small business and build financial independence with that endeavor, you’ll need to access that money before age 59.5 without penalty, so your investment selection should reflect that.
Stay Focused
Players need to stay focused on the basketball game in front of them to be successful, and you need to stay focused on your long-term goals. It’s important to understand why you’re investing and why you’re pursuing financial independence. That starts with identifying what financial independence means to you.
Know this: your idea of financial independence may shift with time, and that’s perfectly okay! It may start with a goal of taking family vacations without dipping into savings, and it may mature into the ability to cover your necessary expenses without needing to work.
Practice Patience
Making the right play at the right time requires basketball players to practice patience, and you’ve got to practice patience, too, to see your investments grow. Investing for financial independence is a long-term game, and it’s important to have patience and discipline. Don’t get discouraged by short-term market fluctuations, and instead focus on your long-term goals.
In the proverbial game of investing, our team is on the sidelines cheering you on with chants of, “It’s about time IN the market, not timing the market!”
Be a Team Player
Michael Jordan, Wayne Gretzky, Serena Williams… what do they all have in common? They’re all among the world’s greatest athletes of all time, yes, but they all also had a coach to guide them.
All these are crucial points for a well-crafted game plan, but there’s a “secret sauce” that the best teams utilize for each and every game they play… they have a plan before they hit the court. And you should have a plan, too. It’s not something to delay until “things calm down” (because will they ever?). It’s something to put in place now to help you prepare to succeed in the game ahead.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
