The last time I saw a client of mine (we’ll call him “Jim”), was 12 months ago, and he was sharp as a tack. A year later, he had forgotten much of our previous detailed personal conversations. I found it odd, concerning, and frankly I was a little sad.
The decline in cognitive retention advances with birthdays. It could be seen in the inability to retain information, inability to multitask, difficulty recalling names, lack of visual perception or poor decision making. But we can’t let this inevitable brain change impact our wallets!
Talk with well-established financial life advisors San Antonio to ensure you stay on the right track. Then create a plan to follow any time a question arises about your finances.
Especially as we get older, we must create a process for making financial decisions. Below is a list of filter questions to answer before any financial decision is made.
1. Based on my legacy, is this the right thing to do?
When you make a financial decision today, consider how it will affect the plans you have for after you’re gone. For example, if you’re making a decision about your home, mortgage or equity, think about how that will change the property if you’re planning to leave it to your loved ones in your will. If it will change dramatically, is it really something you want to do?
2. Based on my past experience, is this a wise thing to do?
Are you known for making rash decisions, and then maybe rationalizing your decision-making process after the fact? You will want to talk with a financial advisor and/or your family before making a decision if you have a history of reacting, opposed to actively deciding on the right decision.
3. What is the downside and the chance that it might occur?
Ask yourself, why are you making this decision? Did you just read a headline? Hear that “The Joneses” were doing it? Saw that the market went up just a bit? Take a breath and really figure out where this decision is coming from. Then consider the pros and cons as well as the probability of both happening.
4. Will this be a distraction?
Remember what your long-term financial goals are. Will this decision deter you from reaching that goal? If the answer is yes, make sure you seek advice before taking any action.
5. What makes me think I can beat the odds?
The Fear Of Missing Out (FOMO) is a real thing, and it can be a dangerous game. The lottery is a perfect example. The chances of you winning are very small, but when the hype increases, people are overtaken by the fear of missing out on a chance to win millions. While a $5 lottery ticket might not be the end of the world, a seemingly small investment move can be. Remember, you’re saving for your future.
6. Did I get advice from a child, a friend and a sage?
Consider who the advice came from. Does that person make rash decisions? Are they correct a majority of the time. It’s always wise to discuss any financial decision with a true financial advisor who knows your plans and puts your interests first.
If you’re caring for an aging parent, read our blog post about the questions you should ask them.
7. Did I take a breath and pray?
Many bad decisions are made quickly. You may be surprised how much a deep breath can settle your emotions and allow you to look at the bigger picture a little clearer.
8. Did I wait? (Most con artists create a sense of urgency.)
Con-artists are sneaky, and they often prey on senior citizens. If you’re reacting from a phone call from someone who created panic, did you take the time to consider whether you really knew the person who called? Did you take the time to really understand what they’re suggesting?
9. Did I consider my future self and others?
How will the decision truly affect you and your family? When faced with an immediate financial decision, it is crucial to think it out. How will this affect these certain things, and how will it affect these certain people. A breakdown doesn’t have to take a long time, and could save you from making a poor decision. Investors should get in the habit of thinking a situation through before making any rash decision.
10. Did I consider the indirect consequences?
If you’ve considered how this particular decision will affect your goals, have you considered what the indirect consequences will be? For example, if you’ve determined that a change in investments will still allow you to maintain your current lifestyle, will it indirectly affect what you’re able to leave behind?
Answering these questions every time an issue arises will help reduce the risk of making a poor decision, financial regret or irrecoverable misstep. And it will help ensure the legacy you wanted to leave will still become a reality.
Contact us and let us know if we can help.
This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.
