Things That Matter

August 22, 2022

Most of the financial media you see or read leads you in the wrong direction.

They talk about what stock you should own, what fund you should buy, or what you are doing with your money now. It makes no more sense than structuring your investments based solely on your age.

When thinking about your financial life, or what to do with your University of Nebraska retirement plan, there is an order of operations to consider. The product (investment) is the last thing you should think about.

Trying to pick the best investment before you've come up with a financial plan is like trying to decide whether to take a plane, train, or automobile on a trip before you've decided where you want to go.

It makes as much sense as a doctor handing out prescriptions before giving a careful diagnosis.

If you want to do something with your money that is more rational, the first step is to have a plan.

Out of that plan, a process comes into focus. The plan determines a saving process, an investment process, and a process for making decisions about how much insurance to have.

Only then do you get to the last step: finding specific products (investments) to implement the plan.

First, have a plan. Then define an investment process. Then find products to populate that plan.

That is how you make smarter decisions with money.