>While you can get financial planning advice from friends or keep up with the latest investment news, you still have figure out how to apply what you have learned. In the New York Times, financial planner and author Carl Richards writes, “Most of what we hear about investing isn’t right or wrong. It’s a matter of applying what we hear to our own situation.” He encourages readers to not mistake investing folklore for personalized advice but to filter investment advice through the prism of personal goals.
But what exactly is investing folklore? Financial folklore is stock tips and other investment practices that have worked well for someone else. You may hear of an investment opportunity or portfolio mix that either sounds like a winner or has already brought in great returns for others and decide to follow suit. Richards would advise caution since you don’t know if that investment will work out well for you.
Your investment decisions must be based on your financial situation and that requires not only looking at your resources, but also examining other factors like your age, your health, and your personal goals. Making the same investments as someone who is younger or older than you may not work in your favor. Following the investment plan of a friend who plans to stay in the same house may not work out well if you intend to spend your retirement traveling around the world. The investment plans of childless couples may differ from those of people who are parents.
In order to clarify your financial goals and assess which investment options would best help you reach those goals, you can work with a Fee-Only financial planner. A Fee-Only financial planner is able to address your individual financial needs because she isn’t working for commissions or for a brokerage house, she works for you.