Maintaining Financial Stability in Volatile Periods: A Straightforward Routine to Preserve Wealth's Growth
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Let's face it, when markets are all over the place, it's just too easy to get caught up in the chaos of endless predictions and unfocused actions. Yet, if you've got a solid game plan, sitting tight and being patient is often the wisest move. After all, as the wise Warren Buffett reminds us, "The stock market is designed to shift money from the eager to the patient."
But building wealth isn't only about investing-and it's probably the aspect we have the least control over. So, regardless of market fluctuations, we can still make headway in our financial life beyond our portfolio. In fact, this progress can feel empowering, serving as a refreshing distraction as everyone else is worrying about stock prices.
In a recent 'Productivity Bites' video, the guru himself, Daniel Pink, encourages us to stay motivated by taking time to recognize our achievements. This coincides with research by Teresa Amabile and her colleague, Steven Kramer, who discovered that the sense of making progress in meaningful work defies money and recognition as the top motivators in the workplace. Instead, it's the accomplishment of our daily tasks that pumps us up and boosts our productivity.
So, how can we apply this insight to our financial planning? Statistics can be deceptive, as your portfolio's value changes daily regardless of your efforts. Plus, there are instances when we deliberately reduce our net worth for reasons like retirement or paying for college education.
So what can we consider as progress towards our financial goals, then? Forget about the dollar amount and focus on the factors of wealth that have been activated.
"Financial triumph isn't merely about amassing riches-it's about harnessing them," declares Doug Liptak, founder of SignatureFD, the wealth management firm where I work. "By periodically reflecting on our financial progress, we observe not just numbers growing, but the impact our money has on our lives, our loved ones, and our world. That's what lends financial planning real purpose."
Doug proposes a four-part mental model to help us reframe our wealth-building journey. Here it is:
- GROW: Focus on expanding investments, savings, career, and personal development during the first quarter.
- PROTECT: Conduct a financial security checkup in the spring, addressing insurance, estate planning, and risk management.
- GIVE: Shift focus in the summer to generosity and impact-financial and beyond, considering charitable contributions and helping others.
- LIVE: Reflect on the impact of our financial decisions at year-end, aligning them with our values for a fulfilling life.
Take the examples below to energize your progress, reflecting on achievements in each category:
Quarterly GPGL Wealth Advancements
- 1st Quarter (Q1): Kick off the year with a goal-focused mindset, bolstering investments, savings, career, and personal growth.
- Did you increase your 401(k) contributions?
- Did you learn a new skill that can enhance your earning potential?
- Did you reach a significant financial goal?
- 2nd Quarter (Q2): Utilize springtime to secure your financial future by assessing risk management and insurance coverage.
- Have you reviewed or updated your policies?
- Have you checked your beneficiary designations?
- Have you taken steps to safeguard your identity or digital security?
- 3rd Quarter (Q3): Tap into your generous side in the autumn, exploring opportunities to donate, support others financially, and embrace charitable giving.
- Have you donated to a cause close to your heart?
- Have you lent a helping hand to someone financially (or with your time and expertise)?
- Have you considered tax-efficient giving techniques, such as donor-advised fund contributions?
- 4th Quarter (Q4): Reflect on the positive effects of your financial decisions throughout the year, focusing on how your wealth aligns with your values.
- Did you make spending choices that brought you joy and enrichment?
- Have you experienced meaningful moments with loved ones or your community?
- Are you satisfied with your financial decisions this year?
It's worth noting that some of the given examples aren't necessarily financial in nature. That's deliberate, as our wealth involves more than money-it encompasses our time, relationships, and overall well-being-resources that many argue are scarcer and more valuable than our financial assets.
Are you searching for additional areas to focus on in your financial journey? Check out the expanded list of implementation items below:
This systematic quarterly approach will ensure you make progress throughout the year, not just financially but on a personal level too-keeping your motivation fueled and your financial future on track.
Absolutely, this approach can be beneficial in our financial journey. By following Tim Maurer's behavioral finance principles, we can overcome apathy and prognostication, focusing on personal finance and wealth management. This mode of thinking encourages elements such as element activation and wealth activation, which can help us make progress towards our financial goals beyond our portfolio.
Investing wisely is crucial, but it's not the only factor in wealth accumulation. By implementing GPGL's quarterly wealth advancements, we emphasize personal growth, risk management, generosity, and reflection - all of which contribute to our overall wealth, not just our financial assets.
Moreover, this systematic approach aligns with the findings of behavioral economists like Teresa Amabile and Daniel Pink, who have shown that a sense of progress and accomplishment, regardless of the dollar amount, can significantly boost our productivity and motivation. So, let's embrace the F51dac812dc2152cbe9e41fa3f8c1330 philosophy and make a difference in our financial lives, one step at a time.
