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Time and Training Needed

When I started my career in the eighties, I was trained to respond to people who thought that they could do a financial plan themselves by telling them that they do not have the time, training and temperament to do so. Well, it is 2007 and let’s review that rationale.

Yes, we are all pressed for time. And many of us would just like someone to “handle it”. By that I mean tell us what mutual funds to buy, what kind of trust we need and who is going to set it up and how much insurance is enough and what kind, etc. But most of us don’t want to pay someone a large amount of money to do all that. We also want someone to blame when the mutual funds don’t perform and we find out that we didn’t have the right insurance or that our trust is outdated and we were never informed to change it. The truth is we just want it taken care of but we don’t want to spend a lot of time and we don’t want to pay someone to do it for us. Well, even though things have gotten a lot more complex than financial planning in the eighties, it is possible for non-professionals to have the time, training, and temperament to do it themselves.

First of all, once you have decided on an asset allocation, you only need to review it once a year. I usually review our portfolio in December because anything that I sell before the end of the year will be a taxable gain or loss that I may benefit from. Many studies have shown that re-balancing a portfolio more than once a year does not produce higher returns.

With all of the new index funds and ETFs (Exchange Traded Funds) that are out there, it is now relatively easy to make up a diversified portfolio to suit the return that you need and at the risk level you are comfortable with and at very low expense ratios.

Wall St. is actually betting that you will panic and sell part of your portfolio off when a correction comes. Just ask all the people who lost money in the technology bust and most all would be looking at big gains today if they hadn’t panic and sold. So unless you are day-trading, you should have a long term outlook on your portfolio, that is, leave it alone for a minimum of 5 years. Your focus should be on keeping your asset allocation where you want it once a year. I know you can do that. If you can’t, I have clients call me and I can pull out all kinds of studies showing how stupid the average investor is because they buy and sell at the wrong times and for the wrong reasons. Don’t let that be you.

You can take the time, and you can find the training, and you can have the temperament to put together a financial plan to accumulate wealth, reduce your taxes, and provide for your heirs. I can coach you through the process and provide you resources to help you through the process.

Call me at 415-819-3065 to talk about how you can get started.

A lot of you didn’t get my last newsletter- Fees Do Matter. I have posted it on the website so check it out.

News Flash! –
I will be holding a FREE teleclass –The 7 Steps to Creating Your Own Financial Plan on Wednesday, October 17th, 6p.m. PDT. Email me (fern@wholeheartedway.com) to register and you will receive the call in number.

Happy Half-Hour!
Join me every Tuesday evening at 6p.m. PDT for a half-hour of discussion on personal finance topics. No charge and no need to register. Just Call 712-451-6000 PIN is 838115#. Bring your rants and raves to the call!

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August 2007-- this column is produced by Whole-Hearted-Way and
provided by Fern Alix LaRocca CFP® EA


P.O. Box 4067
Mountain View, CA

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