This column has previously discussed "picturing the future we want", and that a plan to achieve this. We said that the plan of goals, measurements, and implementation should include. The fact that the embodiment is directed towards this column.
Putting the plan into action is what implementation is all about. Its one thing to have goals, but without concrete steps to achieve them, they remain dreams. The last column discussed measure of money for each of these goals. Now is the time to find out how we're going to put that money. Together
Of course, the first step is for the obvious. We need a source of income. This would be a salary, a donation, or even a loan (although we would normally advise against the latter option). One could consider multiple sources of income. This protects against excessive reliance on one source.
Assuming some income exists, we can begin to make plans for savings. Based on our analysis, we can determine how much should be saved on a daily, weekly, monthly or annual basis to achieve our goals. We can then consider whether it is possible to get the money fast enough to achieve growth. Our target date
If, in the end, we do not find ourselves able to save for our goals, we must remember that adequately the problem is not in our plan, but in our income levels. Sometimes it's just a matter of recognizing that goals can be without adjusting income levels. Unreachable This might involve second job, or side businesses, or rather may require stepping back from the situation completely, and increasing employability through education and training. It may also suggest that new, creative ideas to be considered. Alternatively, simply on sale of non-productive assets. Whatever may be the case, the income level is a crucial part of a financial strategy, and often overlooked by investment professionals.
Finally, when the incomes and savings decisions are established, we turn to the last part: the investment strategy. The latter strategy may include many different types of investments, and use many different types of methods, but in the end, it should always focus on the objectives.
For example, if the goal is to buy in one year, investing in stocks is not a house, the optimal strategy unless you plan to have a great deal of risk taking. On the other hand, if you are planning to buy if you have earned enough money, a house, but plan to continue regarding the specific time, flexibly stocks are more viable.
This brings us to the treatment of type assets. This is one of the most important decisions to make. There are at least a dozen different types of assets to choose from. Some of the most popular are:
Stocks Mutual Funds Real Estate Limited Partnerships
Art & Collectibles Gold / Commodities Bonds Insurance
Companies Derivatives
Of course, this list can go on, but we will focus on some of these. Let's first get rid of the obvious. Investing in a business can be a good choice for someone with a solid business plan and sufficient time and capital to make it works. However, many companies have a full-time commitment, and unless one is able to do their regular income, it can be a problem. It is possible to start part-time, a company is dependent on the type, and this may be an option for some. You could also invest in other people's business, but should be concerned with issues of fairness, compatibility, and incentive here. Finally, investing in a company with liquidity problems themselves, because they do not always sell a business for what it's worth, without first locating an ideal buyer. So, if you have planned to sell at a certain date, pending the achievement of a goal, you have problems.
Limited partnerships with them unnecessary trouble, especially because there is not a large market for both. So, even if they value, one may not be able to easily sell them. In this way they appear on investing in small businesses, and carry the same risks.
Insurance really should not be regarded as an investment, but I include it here because it is so often sold as an investment. In many ways one can help you plan for tax considerations, but as a pure investment, it is a non-starter.
Art & Collectibles may sometimes increase in value over time, and for people with specialized knowledge in a particular area, it may be a wise speculation. However, just like running a business, it takes time and energy, and has liquidity problems. Yet this one small part of a portfolio for some investors.
Commodities are greatest asset of a uniform point for all uniform value. This would include oil, orange juice, coal, silver, or pork bellies. Gold is a commodity with unique properties because of its long history of use as money and reputation as a reliable store of value. All goods have fluctuating prices in common, and those who invest in commodities generally have a thorough knowledge of the market for that particular good. Over 90% of people who lose money investing in commodities, while generally make a comfortable living. Experts Investing in commodities can be very risky for those who do not have specialized knowledge.
Reach Scott Pearson for comment or to learn about its investment adviser services, visit
Scott Pearson is an investment advisor, writer, editor, instructor, and business leader. As President and Chief Investment Officer of Value View Financial Corp., he offers investment management services to a wide range of clients. His own newsletter, Investor's Value View, is distributed worldwide and provides general money tips and investment advice to readers both internationally and in the U.S.
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