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Six Resolutions for a Happy Financial New Year

Happy New Year! Have you made your resolutions for 2019 yet? If you haven’t added any financial resolutions to your list, I have six for you to consider for the year ahead. Pick a few of them or take on the entire list. Either way, you’ll be that much further ahead by the time 2020 rolls around.

  1. Resolve to do nothing. If you have a well-built investment portfolio in place, guided by a relevant investment plan, your best move in hyperactive markets is to let that plan be your guide. That often means doing nothing new with your holdings. I list investment inactionas a top priority, because “nothing” can be one of the hardest things to do when the rest of the market is in perpetual motion! An additional part of this strategy should involve prudent rebalancing. When was the last time you reviewed your holdings and determined whether the time was right to rebalance? (If you work with AMDG Financial, this is something we already do on your behalf.)
  1. Resolve to double down on your planning. If the “do nothing” approach makes sense to you, remember that in turbulent markets, that approach hinges on having that relevant plan in place to guide your appropriately structured portfolio. A fresh new year can be a great time to tend to your investment plan – or create one, if you haven’t yet. Have any of your personal goals changed, or will they soon? How might this impact your investment mix? Have market conditions put your portfolio ahead of or behind schedule? Are you unsure where you stand in the first place or how your portfolio may be impacted by taxes in the future and how that may impact your overall retirement goals? It’s time well-spent to review your plan periodically to make sure it remains relevant to you and your personal circumstances.

  2. Resolve to create a rainy-day strategy. Even with a crystal ball, I can’t tell you whether 2019 markets will be friendly, foul, or (if it’s a typical year) an unsettling mix of both. Having a rainy-day strategy to tide you through any rough patches is a best practice no matter what lies ahead. Knowing your near-term spending needs are covered, or can be covered quickly, should help with both the practical and emotional challenges involved in leaving the rest of your portfolio fully invested as planned, even if the markets take a turn for the worse.

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  1. Resolve to review your financial landscape. While you’re busy “doing nothing” with your investments, you can direct your attention to your bigger financial picture. While you don’t necessarily need to act on everything at once, it’s worth reviewing your financial situation annually to identify areas in need of attention. Maybe you have a debt load you’d like to reduce, or an estate plan that’s no longer relevant. Perhaps it’s been too long since you’ve reviewed your insurance coverage, or you’d like to revisit your philanthropic goals in the context of the latest tax laws. Refreshing any or all of these items could likely contribute more to your financial success than fussing over the stock market’s daily ups and downs.

  2. Resolve to perform a cybersecurity audit. Protecting yourself against cybercriminals is another excellent use of your time, and key to safeguarding your important financial information. With the new year, consider revisiting a few basic, protective steps, such as: changing key passwords on your most sensitive accounts; reviewing your credit reports (usingcom); and placing a freeze on your credit file to block unauthorized access (now free, based on recently enacted federal law). Especially with child identity theft on the rise, these actions should apply to your entire household. Unfortunately, even minor childrenare now at heightened risk.
  1. Resolve to have “that money talk” with your kids, your parents, or both. Speaking of your kids, when is the last time you’ve held any conversations about your family wealth? It’s never too soon to begin preparing your minor children to become financially literate adults. Then, as you and your parents age, you and your kids must prepare to step in and assist if dementia, disability or death occurs. There also can be ongoing conversations with adult children related to any legacy you’d like to leave as a family. For all these considerations and more, an annual “money talk” can be critical to successful outcomes.

So, there you have it: Six creative ways to bolster your financial well-being while the stock market does whatever it will in the year ahead. While this list is by no means exhaustive, we hope you’ll find it an approachable number to take on … with two critical caveats.  

First, we’ve got a bonus “financial best practice” to add to the list:

Above all else, remember what your money is for.

Money is meant to fund your moments of meaning.

 So, be it resolved for the year ahead: Next time you find your stomach tightening at the latest frightening or exciting financial news, tune it out. Walk away. Go do something you love, with those whose company you cherish. Circling back to our first call to inaction, not only will this feelbetter, it’s likely to bebetter for your financial well-being.

Second, we recognize that each of these “easy” best practices isn’t always so easy to implement. We could readily write pages and pages on how to tackle each one.

But instead of writing about them, we’d love to help you do them. At AMDG Financial, we work with families every day to convert dreams into plans, and plans into achievements. We hope you’ll be in touch in the new year, so we can help do the same for you.  

Click here to view previous news releases from AMDG Financial.

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