What does your March Madness bracket have to do with financial planning? More than you might think!
(Click the featured times below to jump forward in the episode)
[2:05] – Predicting Outcomes.
- With your brackets, you pick teams that have done well in the past. Likewise, in retirement, you look for things that have worked in the past. Certain tools help people retire with confidence to retire the way they want. Having predictability in these tools will give you a higher probability of succeeding.
[3:44] – Upsets.
- People love to root for the upset, for the “Cinderella story.” We do the same thing in regards to the stock market. However, when the market moves, you can make money whether it goes up or down. In the financial world, what if you just didn’t participate in any of the losses? Ask yourself, “How can I not participate when things go down?”
[6:14] – Picking Your Own Team To Win.
- Regardless of whether their favorite team is good, some people like to pick their own team to “win it all.” In retirement, sometimes people are overexposed to their own company’s stocks. Regardless of how that company is performing, they’re apt to invest in their company. When you leave that company, you don’t have as much of the intel as you used to have. Why keep so much of your portfolio in one security? Make sure to diversify.
[8:30] – Making Risky Picks.
- Only risk what you’re willing to lose. Everybody loves to win, be it in the March Madness pool or the stock market. If you want to take investing risks, have a separate account for risky assets. Otherwise, stick with a more prudent investing strategy.
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