Everything You Wanted to Know About Your Finances


The advisers all agreed that no matter what your circumstances, you have to pay yourself first. Meaning, you have to make regular, consistent savings contributions toward building a retirement nest egg and wealth that will last a lifetime.

BE: How do you advise your clients on how to approach their savings and investments when there are fluctuations in the market? The Dow hit 13,000 points, at the same time money market rates were down to 0.50%.

Young: I find that people have a tendency to focus on what’s external–the economy, global, and political issues. I ask people to focus on their internal financial life. Understand your risk tolerance, because most people’s portfolio allocation is not consistent with their risk tolerance. They may have their entire 401(k) in stocks, but they may be a balance investor, meaning, they really need 50% bonds and 50% stocks. Take a risk tolerance questionnaire. It will give you a sense of what kind of appetite you have for risk. Second, you need education about the markets. The markets will fluctuate. They are very cyclical. So, you have to be able to accept some fluctuation.

St. Claire: An investment plan includes risk tolerance in addition to time horizon, tax circumstances, and special circumstances. I think time horizon is one of the critical elements that come into play because the market will fluctuate by definition. Depending on your time horizon, that is going to affect how you feel. If the market fluctuates, even if you’re 30 years old, if you can’t sleep at night your investments aren’t in the right place. I think that’s a really key correlation.

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