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Controlling Your Financial Future

You have a lot more control over what your future will look like than you may realize. If you
set any long-term savings goal such as retirement, there are six basic factors that will
determine how much you will have when you need it. You control 83% of them.

Things you can control
1. How much you save
2. How long you save
3. How much risk you take
4. How much you pay in fees
5. How you behave as the investments go up and down in value

Things you cannot control
6. How the market will perform

Numbers 1 to 5 are completely in your control (though number 5 is not an easy one). Despite
this, the financial media has built a large business out of focusing on the last factor.
Here are some examples of things you might have read or heard in the past.

“We recommend these five stocks, which are carefully screened through our proprietary
algorithms to outperform the S&P500”

“Rotate out of equities and into cash NOW because the 200 day moving average has crossed a resistance level and the market will drop 33% in the next twelve months”

“We see the bull market ending this year, with the S&P 500 peaking in month X at a level of Y
and then declining”

Does anyone actually know what an investment will do next or which direction the market will move tomorrow?

You can go out to the Internet right now and probably find a seemingly credible argument for why the stock market will be higher in the next month and another equally compelling argument telling you why it will be lower. Some of those predictions will obviously be right. Does that mean they really knew what the future held?   Hint: If they did, why would they tell you?

Loosely translating a famous quote to the subject at hand: 

“Control what you can, accept what you cannot and have the knowledge to know the difference.”

Steps to Control Your Financial Future

So what should you do? You should focus your effort on what you can control:

  1. First and foremost…and the most critical: Save as much as possible and save as early as possible.
  2. Design your long term investment portfolio using the academic Investing approach.  
  3. Keep your total investment costs as low as you can and control the tax impacts of your investments.

By developing a written plan using the above criteria, you should keep the vast majority of what the market provides; will know if you are saving enough and how to improve if you are not; and should be able to relax and focus on other things in your life, knowing you have a roadmap to get you where you want to be.

Learn more about the Synergy investment philosophy

Investment advisor representative of and investment advisory services offered through Garrett Investment Advisors, LLC, a fee-only SEC registered investment advisor.  Tel: (910) FEE-ONLY.   Synergy Financial Planning may offer investment advisory services in the State of Connecticut and in other jurisdictions where exempted.

Investing involves substantial risk and has the potential for partial or complete loss of funds invested. Investments mentioned may not be suitable for all investors. Before investing in any investment product, potential investors should consult their financial or tax advisor, accountant, or attorney with regard to their specific situation.