No matter how much you plan or save, any big life change, like retirement, buying a home, or sending the kids off to college — can drum up financial fear. “You’re no longer building your assets, you’re starting to distribute them,” says Nick Walton, CFA, a portfolio manager and vice president for First National Wealth Management, a unit of First National Bank. “It can be stressful, no matter how many assets you have.” Here, Walton offers some tips on how to work through life’s transitions.
Do some stress tests.
When you’re putting assets aside for something specific like retirement, a financial planner can talk you through all the different scenarios, like a market downturn or a sudden spike in expenses due to a medical issue or a big home repair, to see how sound your asset base is. Start this process early and revisit these discussions on a regular basis. The more time you spend planning, the better off you are.
Take the long view.
It’s easy to get caught up in the drama surrounding the latest news, whether it’s world events or a company missing its earnings target, but successful investing requires time, discipline, and patience. Sometimes that’s really difficult. It helps to have an advisor who can answer your questions, and has a disciplined, rules-based process for rebalancing portfolios.
Stay in your own lane.
I see a lot of people pegging their investments on benchmarks like the S&P 500, but at the end of the day, you’ve got to base your financial goals on your personal timeline, such as when you want to retire and what kind of lifestyle you want to have, whether you’re looking to just cover your basic needs, or you want to buy a vacation home.
Find the right partner.
Choose a financial planner with whom you can build a long-term relationship — someone who understands your plans for retirement and your philanthropic priorities, someone who understands your values and will ensure that your investments reflect them. You also want to work with someone who can act as a quarterback and coordinate with your CPA and attorney on your taxes and estate-planning needs. I’m based in downtown Bar Harbor, and a lot of people like the fact that they can dial a local number and someone they know answers the phone. They’re not dialing an out-of-state number or dealing with an online chat. A lot of folks also like that we’re part of a bank, and we have a six-member investment committee that adheres to certain policies and reviews investments on a regular basis.
