For the Best Advice in 2012, Look to Yourself

Special to HuntingtonNews.Net
Henry Dillon
Henry Dillon

With the melancholies of 2011 finally behind us, and the full potential of a new year yet to come, it has become customary for millions across the country and here in the Mountain State to reconsider the state of their finances. In this annual period of recovery from overindulgence and often stressful family gatherings, getting a fresh perspective on personal finances should not add to anyone’s anxiety levels.  To the contrary, it is possible to carefully structure one’s finances to minimize the ongoing pressure it places on individuals and families as well. 

This goal can be assisted in part by heeding the following warnings:  Always ask the right questions, and beware of financial gurus who issue blanket statements on mass media before immediately disclaiming their own advice. 

Making sure that you are asking the right questions is as fundamental as it gets.  If you are among those who perpetually ask the age-old questions  of  “Where is the best place to put my money?” and “What can I do to beat the market?” then you are especially at risk for a stressful 2012. 

Consider both questions.  In each case, the would-be investor is entirely missing the point.  Who cares if you can beat the stock market by half a percent when the overall market may be up or down by twenty or thirty percent under differing circumstances? 

Likewise, finding the absolute best performing asset becomes useless if you inadequately consider the application of those funds to your unique life circumstances.  For example, what good is a collection of vintage Chanel or a timeless car if it takes a prolonged period to sell them and you’re facing foreclosure?  Your rate of return may look impressive on paper, but if you need to sell them quickly, their value will be unimportant if you can’t liquidate.

If we were to rephrase each question to become more relevant, they might sound something like “What is the best use of my dollars to achieve the greatest net benefit at this time?” and “What can I do to build a base of steadily growing assets for retirement?” 

The difference is in the attitude reflected in each question.  Depending on one’s income status, stage of life, emotional makeup, and a host of other factors, there are hundreds, if not thousands, of “best investments,” but there is only one best approach for you and your family.  Take the time to consider how your decisions will impact both you and those around you.

 Of course, there are those who would be glad to tell you what to do with your money.  They make it easy:  “Buy gold.  Don’t buy gold.  Buy a house.  No, rent instead.  Pay down debt.  Use your credit cards.  Don’t use your credit cards.”  The fact that they file taxes as entertainers and not advisors explains a lot.  If they had to maintain accountability with real clients, they would not be nearly so free with their generalities.  Instead, they would be doing exactly as recommended before, inquiring about the specific circumstances of each individual, and helping to craft a strategy that would help those people get closer to their end goals.

The bottom line is simple.  For a financially peaceful 2012, be as honest with yourself as if you were facing a crisis, because if you do not, you all but guarantee that you will face one of financial stress.  Remember to ask the right questions, and only you know enough about your circumstances to be qualified to formulate those questions.  The mass media gurus can never begin to provide the type of help that you can give yourself.  

 

Henry Dillon is the Principal Advisor and Consultant with Founders Finance in Huntington, WV. More information can be found at www.foundersfinance.com

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