This question is the most asked question I get from family members, friends, and clients.  Everyone wants to know what to expect and how they should plan accordingly.  Although I don’t know what to expect exactly, I do have some strong opinions about what might happen and how we should be planning ahead.

Clearly, the most important trigger dictating the direction of the economy   going forward is jobs.  In order for our economy to push forward we must create jobs and those jobs must come from the private sector.  It is unforeseeable to sustain a growing economy if a large percentage of our job creation comes from the public sector.  We have to sustain growth in the private sector and both the private sector and the federal government must work together to find ways to do so.  So with that said, if we continue to see an increase in jobs with the majority of those coming from the private sector then we will be on our way to an improving economy.

Another important trigger affecting our economy going forward is the current tax code.  In case you are unaware, the current tax code is set to expire this year which means we will all be looking at an increase in our tax bracket percentage.  Now of course our leaders tell us that they will be revisiting this situation after the November elections which gives them little time to put in place a new schedule.  The concern lies solely on the potential outcome of raising taxes in a sluggish economy because it could adversely affect consumer confidence which is a supporting factor of economic growth. If we as consumers aren’t confident then we’re certainly are not going to spend which in turn eliminates the need for jobs which brings us back to where we started.

I also have one last opinion for this article.  If we are to spur growth for the  long term then we are going to have to figure out a way to become an exporting nation again.  As important as it is to create products and services that are needed right here in America by Americans, we must find a way to reach the billions of consumers that are outside our borders that are in need of our products.  As we all know, that is not an easy fix due to the earnings disparity in other countries compared to ours here.  However, it is something that needs to be addressed and once again the private sector and the government must work together to find ways to level the playing field through fair trade and other means of change.

As you are probably aware, the problem of economic growth is not limited to just these opinions.  We have a lot of obstacles facing us today and in the future.  However, we can and will overcome them with time.  However, if you are concerned on how the overall economy is or might affect your personal economy going forward then I suggest you talk with a financial advisor. It is always important to be mindful of your financial plan going forward regardless of what is happening in the overall economy.

As we all know, the markets and the economy have been one heck of a roller-coaster ride in the last 18 months. We’ve experienced a flood of emotion and concern about where we are as an economy and what is ahead for us in the future. This a major question and one our clients have been asking us for quite a while. However, this isn’t the only concern we’ve heard. I’d like to share with you some other concerns and answers we got from our clients in a recent survey.

In our survey, we asked the question, “What is the most important challenge facing you in the coming years?”
The most popular answer with a 72 percent response was “sustaining my current lifestyle.”

The next question we asked was, “What is your greatest concern in retirement?” and out of all of the responses to choose from, “outliving our money” was by far the overwhelming choice.

These two questions sum up what the majority of people are concerned about, and that is inflation and its effect on their investments and lifestyle in retirement. The question is, “What are you doing to prepare for whichever market comes our way, and what inflation rate we might see in years to come?”

The answer to all of these questions is uniquely different for most everyone, but it shares one commonality and that is to take action and take it now! That action might encompass reallocating your funds, saving more, spending less, and choosing products and investments that can help solve the problem. While there is no easy answer, a good financial adviser can help guide you through these tough decisions and provide a level of accountability that most everyone needs.

See financial adviser to prevent problems

 So, you might ask yourself, “What do I need to do right now?” For starters, do not wait for the problem to sneak up on you. You should talk with your adviser to see if you’re prepared for inflation going forward. You also should speak with him or her about an investment strategy for your assets if you’ve been affected by the recent downturn in the market.

Remember, you don’t need a cheerleader for your investments; you need an adviser, someone who will guide you and work for your best interest in good markets and bad.

Why is it that most people plan thoughtfully for life goals but seem to push to the side their financial planning goals?  This is a question that has confused me for years.  It’s like people are programmed to fall short on financial matters.  Then it hit me, most people are programmed to fall short on financial matters.  Think back to your time in school for instance.  Do you remember learning about budgeting your finances and investments or how to start and operate a business?  I would venture to say most likely not.  We were taught how to dissect a frog and label its intestines not to mention a score of other things we’ve never used since the day we finished a particular class.  With that said, we need to learn how to develop the right money habits to achieve financial freedom and I’d like to cover a few of those with you now.

First of all, have a budget.  This is a simple solution to a lot of financial problems out there.  However, most people live without one and that includes the affluent.  I would recommend your do a review of your most recent bank statement and write out on a piece of paper where all of your money went the past 30 days.  Once completed, most people are literally mystified by how they spent their money.  This would be a great start to prioritize your expenses and start saving.

Next, distinguish your needs from desires.  This usually is a hard sell because we are all emotionally driven when it comes to our purchase decisions.  Ask yourself this question next time, “Do I need this item or do I just want it?”  If you get in the habit of asking good questions you’ll save a lot over the course of the year and be much better off for it.

Next, you must learn the difference between good debt and bad debt.  Some experts say that no debt is the only way.  However, not everyone can do that.  That’s why it’s important to make good decisions with debt.  The basic rule is this; a bad debt is an item or good that will depreciate in value such as a vacation you can’t afford, a more expensive car, or basic extracurricular activities that use your credit card for.  A good debt is something like a mortgage, business loan, or student loan.  If used for the right reasons, these kinds of debts could be referred to as “investment debts” because they are meant to add long term value down the road. 

And lastly for this article, start to set financial goals and take them seriously.  When people begin to educate themselves about money, they start to see how the financial world works and begin to see their own potential in it.  Ideally, they’ll align themselves with a financial advisor who can help guide them along the way and provide them a shared commitment to wealth building.  If you haven’t made such a commitment, then today is as good as any to make that happen.

It’s that time of year again, the time we conduct a self evaluation of ourselves and circumstances and see what areas we want to improve. We like to refer to them as resolutions even though we should call them and, more importantly, treat them as goals. Regardless of your choice of terms, this year happens to have even more significance. “Why?” you might ask. Well, not only do we close out 2009 and enter into the New Year but we also start the next decade of our lives as well. So, what financial resolutions do you have in store for this coming year and decade?

I know trying to forecast 10 years out is pretty difficult considering the last ten years we just experienced. We’ve dealt with the Y2K scare, then 9/11, two wars, the tech bubble, the real estate bubble, and the Wall Street bubble. As grim as all of that sounds, we’re still here and are pushing through. It’s not been easy and probably won’t be any easier going forward but how did you progress during that timeframe. Are you in a better financial position now than when you started? If so, what were some of the things that helped you improve your situation. Try and look back to see what things you could have done better such as household budgeting, saving more, or spending less. This exercise is not meant for you to go back and beat yourself up, it’s more for you to learn from your past decisions in case you experience the same type of challenges going forward.

With that said, what should you be doing right now to get ready for all of the positive change you want to experience in the New Year and beyond? First, write down your financial resolutions and make them public with someone that can help you stay on track. This could be a spouse or even your peers. You should also include your financial advisor on any goals you have going forward. If you don’t have a financial advisor, it’s time to find one.

Second, make your resolutions realistic. Sometimes we make our goals so big that we get easily discouraged when we don’t see the progress we were hoping for. Hope, coincidently, can be detrimental to the success of your resolutions. Most of your goals are going to take massive action on your behalf to come to fruition. Resting on hope alone can sabotage your success.

Lastly, make your resolutions measureable. Nothing will kill a resolution faster than a half hearted attempt to accomplish something. Your resolutions have to be descriptive and clear as to what you are trying to accomplish. Break them down into stages so you can easily see your progress. This will help you stay focused towards the end result you’re looking for.