Here’s a Cover Story that is certainly a bit different from our usual.  Rather than speaking directly of the Deep Creek Lake area, its attractions and community, this story deals with a topic that actually influences all of those and more.

We all have dreams and aspirations and, hopefully, a long-range life and financial plan and this piece speaks to those aspects of our lives.  Unless one is independently wealthy one needs to save, invest and create a financial future based on hard work, knowledgeable investing and building a nest egg.  In the short-term, savings allow us to rent a boat, vacation at the lake, or go skiing.  In the longer-term, investments and all of the fruits of sound financial planning, allow us to buy a second home at the lake or on the mountain, move here permanently, retire here when the time comes and maintain our standard of living.

This article, written especially for our readers takes a somewhat simple, unique and interesting view of investing.  Happy reading…

Investments are like…buying shoes!
By Andre Weisbrod with contributions from Michael Huber and Sophie Xu of Quantum Financial Advisors, with edits provided by Mike Tumbarello of Deep Creek Times.

What do you call shoes made of banana peels—Slippers. What kind of shoes do ninjas wear—Sneakers. Who is the greatest shoe collector of all time? Imelda Macros, who left behind 2700 pairs, 800 of which are in a museum. She had owned many, many more during her lifetime. But who is the greatest investor of all time? It depends…

Like shoes, investments are created with purposes in mind. For shoes, there are a variety of types: walking, running, specific sports, work, home comfort, pain reduction, fashion, etc. Investments come with a variety of purposes and in many forms as well: income, growth, venture, money markets, CDs, bonds, stocks, mutual funds, real estate, derivatives, limited partnerships and more…

We all have different feet, and we all have different financial situations and goals. In both cases, we want to find solutions that FIT! If you buy the wrong shoes, you will hurt your feet. If you buy the wrong investments, you will hurt your financial well-being.

Fit is the key to success. You should buy things which match their intended purpose and that fit you! Mismatch purpose and fit and you will have problems of injury, pain and even looking foolish.

To make good shoe choices, you need: selection (variety), purpose, research, advice. To make good investment choices you also need:  selection, purpose, research and sound advice.

Here’s a simple comparison:

Purpose Shoes Investments
Work Solid, designed for wear and tear Core, solid, value
High-level accomplishment and performance Sports and higher-level physical activity Aggressive, growth-oriented
Comfort and stability Should apply to all shoes.  If not comfortable, don’t wear them.

 

You need to be comfortable with where your money is invested

 

Health and Healing Designed to alleviate pain and lower the risk of injury Designed to address risk and prevent pain and suffering
Fashion Fun.   Hey, look at me!  But if fun hurts… Entrepreneurial excitement, but watch out for “can’t afford” problems

 

We should all have a purposeful, well-conceived and organized financial plan:

  • Make A Controlled Budget – Spend less than you make. Spend, save and invest, then “give”
  • Consult good advisers – Engage a financial planner, investment manager, insurance agent, accountant, lawyer
  • Define Objectives – Where specifically do you need “to be” and when
  • Address Risk – Savings and Insurance
  • Direct cash flow – Know how much you need to save and invest and where. And then, Just Do It!
  • Organize and Invest Assets Wisely – Diversify, track performance and limit expenses
  • Make an Estate Plan – Make decisions now to help your heirs later

What’s more, avoid the big destroyer, the negative investment: debilitating debt, such as credit cards, too much car, too much house, etc. Behold the powerful proverb, “… the borrower is the slave of the lender…”, There is “productive debt,” i.e. leverage, but it must be used carefully at the right time, in the right amounts and for the right investment. 

To have a purposeful, well-conceived and organized financial plan, you should consider types of investments:

  • Savings “Buckets” – Escrow, emergency fund, vehicles, education, vacation, etc.
  • Conservative Core – CDs, bonds, guaranteed annuities, conservative stocks
  • Long Term Growth – Growth stocks and funds
  • Aggressive – New companies and ideas, private equity, personal entrepreneurial activity

There are some hallmarks of success: good purposes, good advisors, good planning, realistic goals and expectations, discipline/self-control, identifying and avoiding risk, hard work and execution of your plan and treating others as you would have them treat you.

What do you need to have great shoes and a successful investment strategy? The answer depends on many factors and is different for each of us.  The important thing is to embrace planning and investing and to take control of your financial future.

Quantum Financial Advisors,
www.QFAinc.com
Rockville, MD Headquarters – 301-296-6203
Pittsburgh, PA Branch – 412-491-1963

Copyright 2019 J. Andre Weisbrod, All Rights Reserved.  Printed by Permission.