The Retirement Corporation of America


You can't make your financial plans in a vacuum. You can't just set some goals down on paper and hope for the best. You have to take what happens in the economy into account.

It's always a good idea to hope for the best of economic times. Going back to 1854, when they first started keeping economic reports, our economy has swung back and forth from expansion to recession to expansion.

We've made that trip 31 times—31 business cycles, moving from expansion to recession and back to expansion. And that bit of history should be an important lesson for you:

•  You have to hope for the best of times but expect that, occasionally, times won't be so good.

•  You can assume that mostly times will be good—that, as shown by past history, we have had four years of expansion for every year of recession.

•  You can learn how the economy works and apply that knowledge to anticipating what the economy is going to do next.

•  You won't have to become an economic professional to understand how the economy works and profit from that understanding. There are lots of easy-to-follow economic indicators to help you and more expert advice about the economy than you could absorb in a lifetime.

•  It's not enough to know what the economy is going to do. Mastering your financial future requires you to put that knowledge to work.

•  The more you follow the economy and act on your knowledge, the more likely it is you will set realistic goals for the future and achieve those goals.

Setting goals and achieving them is what mastering your financial future is all about. Based on all that you have learned in the lessons of Successful Investing & Money Management, the only one who can prevent you from setting goals and achieving them is you.

Now you have the necessary skills, understanding and self-confidence to make it all happen for you and your family. Now you are equipped to master your financial future. The rest is up to you.

Information is the key to investment success. If you don't know all you should about your investments, you'll pick the wrong stocks or funds, and you'll buy and sell at the wrong time.

Lack of information is the most significant detour you can face as you travel along the path to financial success.

It used to be that as an average investor, your access to investment information was nil. The markets belonged to a handful of insiders, who kept the news all to themselves. That has changed for a great many reasons. The law no longer allows it and technology makes it impossible to keep information private.

So, it's now possible to learn more about investing than ever before. The big investment profits will go to those who make the most of the information revolution.

Learn more about what you already own. Learn more still by taking advantage of all the publications and periodicals that now serve the needs of individual investors. Learn a great deal more by making use of computer technology and the Internet. It's all there, easy to reach. The more you do reach for, the more investment success you can achieve.

You'll have to learn how to sort through a ton of information for the ounce of investment wisdom that can do you the most good. You must avoid the temptation to turn everything you read or hear into an instant investment decision.

What is really important these days, is that you must steer clear of the countless scams the Internet will throw your way.

But there is investment information and wisdom available to you today that no investors in history have had access to. The more you make the most of all this information and wisdom, the smoother your path to financial success will be.

You don't make one financial plan to last a lifetime. You make a plan and implement it. And then you benchmark, to measure how well your plan is working. Once you see what's working and what isn't, you revise the plan for the next stage of your life.

The purpose of any financial plan is to answer these four questions:

•  Where are you now?

•  What are your goals?

•  How much will it cost to get what you want?

•  Where will you get the money?

Use this three-step approach to planning to keep your financial planning fresh and up to date:

•  Make your plans.

•  Implement your plans.

•  Benchmark your plans.

You can't expect to reach all your goals at one time, so you draw a financial planning timeline. It breaks down your goals by short-term, medium-term, and long-term. Now you know what you want and when you want it.

It's one thing to set goals and another to pay for them. You can't make realistic financial plans without doing a lot of thinking about what your plans are going to cost you—and how you expect to get the money.

The key document for benchmarking your financial planning is your personal balance sheet. By subtracting what you owe from what you own, you determine your net worth. Then you try to keep your net worth growing to pay for what it will cost to reach your goals.

The point of benchmarking is to raise questions about your financial plans which you are then forced to answer. That gives you a chance to see where your plans are falling short in time to do something about it.

Benchmark your investments closely enough so you know when to make changes in your portfolio—but not so closely that you become a compulsive, shoot-from-the-hip speculator.

Make changes in your investments when there is a compelling reason to do so. Just remember, that investors do best over the long term when they act cautiously and after much deliberation.

Life-stage financial planning creates a framework that takes into account the changes in goals and resources that will take place during your life. There are different things you must do at each stage of your life. Life-stage planning tells you what to do—and when to do it.