By Steve Harvey
The financial world is complex. Rules and regulations change every day. Events happen that are outside our control. And to make matters even more complicated, everything is interconnected.
Fortunately, you don’t need to understand how everything works. You just need to know what you have to do to achieve your financial goals.
And that is actually quite simple. All you have to do is follow my number-one financial lesson:
Stay focused on your long-term objective.
I know, it’s kind of vague but it’s extremely powerful. Let’s take a closer look at how to actually do it.
Step 1: Ignore The Media
One of the easiest ways to lose sight of your long-term objectives is to get sucked into the media. The information that is presented in the financial press, newspapers, magazines, TV (especially cable), and social media should all be taken with a grain of salt. Don’t be easily swayed by what you see or hear!
Investing is a multi-year process, not a day-to-day tweet storm. Basing your financial decisions on media ups and downs is a surefire way to make unwise financial decisions (not to mention develop high blood pressure).
So turn off CNBC and Fox Financial, and go read a good book instead.
Step 2: Remember History
Here’s why I think it’s silly to ride the “media waves.”
I got my start in the investment business with EF Hutton in 1983. At that time, the Dow Jones Industrial Average was less than 2000.
Now, think of all the disasters that the U.S. and foreign governments have had to deal with over those 36 years. How many times has the media riled people up with “economic crisis” talk?
Well, despite all those economic catastrophes, here we are—with the Dow Jones recently hovering around 27,000.
The “big picture” is all that matters. Don’t get lost in the minutiae.
Step 3: Stick To The Plan
So, we agree that focusing on the big picture is a good idea—but what does that mean in action?
It means designing your financial plan around long-term objectives and sticking to that plan—no matter what happens in the short term.
Stay with high-quality “blue-chip” companies. Buy more when they go on sale. And whatever you do, don’t let your emotions guide your decisions during downturns.
Remember, you don’t care about what the economy does in the next year. You care what it does in the next 10, 15, or 20 years.
I hope you now see how important it is to stay focused on your long-term objective. But how do you know what your long-term objective should be in the first place?
That’s where a financial advisor comes in. Financial advisors are trained to help you build a personalized financial plan based on your specific goals and unique situation. Once you have a solid plan in place, you’ll know the exact steps needed to work towards your financial goals.
If you’re interested in creating your own financial plan, The Harvey Group has a team of experts happy to help. Contact us by emailing [email protected] or calling (703) 549-5447. Or, if you’d prefer, simply click here to book an appointment online today!
Steve Harvey is a financial advisor with more than 34 years of industry experience. He is also the founder of The Harvey Group, an independent investment consulting firm based in Alexandria, Virginia. He works closely with middle- and upper-middle-class families to help them address their critical financial planning challenges, from investing with confidence to planning for retirement. Based in the Washington, D.C. area, he works with clients throughout Virginia and Maryland. Learn more by connecting with Steve on LinkedIn or visiting www.steveharveyllc.com.