What Are Your Retirement Values? Defining Success for Life’s Victory Lap

Awareness is key to change, but you also need action. In fact, you need focused, decisive and immediate action to see change and to get yourself back on the road to financial independence.

There are a lot of decisions to make when forging your way to financial independence, there are also countless paths to each destination and countless solutions to each problem. Most folks are also juggling more than one financial goal: retirement, emergency funds, college education for children. How do you prioritize? How do you find the right solution for retirement or long-term care? All the decisions can be overwhelming, which causes many to check out of their own financial situation. While taking a step back when one feels overwhelmed is a natural response, refraining from taking action can ultimately do more harm than good.

Definitive action can both propel you towards financial independence and protect the traction you’ve already made. The sooner you start investing in your financial future, the more your funds can grow due to compound interest. The longer you wait to address any financial problems, the more these minor issues can snowball into larger issues, which can often be the case with debt. Also, if you haven’t taken decisive action to establish an emergency fund or invest in the proper form of insurance, an unexpected event can derail you further from your route to financial independence.

Our Advisors at Trilogy try to help you take the guesswork out of making a decision. Some of the worst indecision is born from not knowing the results of choosing Option A over Option B. However, our Advisors /Life Planners can run various scenarios for you, showing the consequences of different courses of action – helping you see which decision may be the right one for you. More importantly, they are here to support you through difficult situations, so the rest of your road to financial independence will be smooth sailing.

Recently, I came across two competing headlines: “Dow Dropped Because the Wheels are Coming Off” and “The Dow is Up Because there are Flashes of Optimism.” On any given day, financial markets swing—one-day values are up and the next they are down. Trying to figure out how to build your wealth by focusing on market ups and downs can be overwhelming. I choose to champion an altogether different approach—behavioral finance. I believe the key to long-lasting financial independence lies in individual behavior inasmuch as it does the markets or various investment tools. Knowing that success lies within you – your choices, your responses to the market, and your long-term habits over time – rather than in the whims of the market, keeps you on the road to financial freedom.

Dangers to your wealth aren’t so much the downturns in the market as they are your own biases and emotions. Behavioral finance requires discipline and rational thought processes which can present challenges for many investors. We may feel obligated to put our kids through colleges we really can’t afford. Keeping up with the Joneses can deplete our savings or prompt us to invest in things that aren’t aligned with our long-term financial plan. And, in times of stress or change, we may be tempted to react by pulling our money out of the market or by doubling down on an investment. Such actions might play out well in our heads but disastrously so in real life. Ultimately, behavioral finance shows us that individuals carry much of the responsibility for their own financial success.

When you assume this responsibility, it becomes clear that you also gain control of your financial future. You have the ability to build wealth and establish a sense of security without worrying about the market. After all, it is the plan and the decisions you make (or don’t make) that have the greatest impact on your journey to financial independence. So, you may wonder, how do I embrace this concept of behavioral finance? First, you have to do some analysis – predominantly on yourself. What kind of spender/saver are you? Is your money going towards your goals and values? Are there steps you should take to limit habits that lead to unhelpful emotional responses? Besides self-reflection, you will need to create a financial plan. Whenever you are tempted to pursue a course of action, pause, and make sure it is in line with your plan’s goals. If it’s not, you must weigh the risks against the rewards. For those situations that require deeper insight, another great tool is a trusted financial advisor. Their expertise and guidance will be an invaluable resource as you strive to build wealth and turn your dreams into reality.

You have a multitude of tools at your disposal once you realize that financial independence is yours to create. It will take work, discipline, and time, but with that comes agency and autonomy. Start planning now so you can start making the decisions and exhibiting the behaviors that will set you up for a prosperous future.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.