Not long ago, a woman in one of my groups proudly announced that she‘d maxed out her 401(k) and had been buying stocks outside her retirement plan based on a friend’s advice.
She had a right to be proud. But when I asked if she was following a plan, she looked puzzled.
“How do you know whether or not your portfolio is properly diversified?” I asked her. “Or if you’re taking too much or too little risk?”
I spoke from experience. For years, I bought individual stocks and mutual funds, based on other’s suggestions. I had no plan.
Then, I hired financial advisor Eileen Michaels. Initially, I wanted her to manage my individual stock portfolio. She wouldn’t have it.
“You can’t invest like that, without a strategic plan,” she told me. “Keeping your investments fragmented is how you’re keeping yourself small.” She had me at ‘small.’
Planning, I learned, is what separates investing from gambling.
Picking stocks willy-nilly, trying to time the market or deferring investment decisions to another and turning your back…that’s gambling.
It’s risky in the worst possible sense.
Investing, on the other hand, is a means to an end. The whole point of investing is to ensure you achieve your goals and protect your future.
I highly recommend hiring a fee only financial planner. Unsure where to find one? I suggest Garrett Financial Planning https://garrettplanningnetwork.com, a world-wide network dedicated to offering professional planning at affordable prices.
Are you gambling with your future or investing in it? Let me know below.
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