I meet with prospective clients and  current clients regularly.  I talk financial planning all day, every day.  I love what I do and am very fortunate that it pays the bills.   But no matter which type of person I am with, people have similar questions.  It’s like they are all traveling the same path… (the reality is, we all are!)

Here are 5 of the most commonly asked questions and my typical responses.  I think you might have the same questions at some point in your life and it’s possible my answers can help you too….

5 Most Common Questions

1. Is now a good time to invest?
2. How do I compare to other people my age?
3. How much should I be saving?
4. What if something bad happens?
5. Am I going to be ok?

Is now a good time to invest?

This question is by far the most common. When the market is down, people are worried it can get worst.  When the market is up, people are worried it will turn… Study after study has proven that the pain of losing money outweighs the joy of making money and I see this first hand.  Even though timing the market is impossible it seems like it’s only natural to try.

My response to this question is always the same.

Now is the best time to invest for your long term goals.   I don’t know what the market will do tomorrow, over the next 6 months or even over the next 5 years but if your goals are long term, now is the best time.  The market will always go up and down and historically it has been more up than down.  If your goals are short term, it’s never the right time to invest.  Money you will need in under 5 years should never be invested. There is to much risk to your life, if you invest dollars you will need sooner than later, and the market has a major correction.

How do I compare to other people my age?

An offshoot to this question is, what are your other clients doing?  Everyone wants to know where they stand.  And as long as they are doing as good or better to their peers they are content.

My response to this question is;

That is not the right question to ask.  I have to change your thinking.   What you need to concern yourself with is are you on track to meeting your goals.   What your friends/neighbors are doing is irrelevant.  If you have more or less than them doesn’t matter.   If your goals are higher or lower and if you will meet them is all the matters.  You know how much money you have, you know how much money you make, if you and your neighbor don’t have a dime saved, is that ok?  As long as you BOTH have zero?   No, it’s not.  You will be measured by your own successes, not anyone else’s.

How much should I be saving?

I see that the amount of money that they want to save, is the least as possible.  Sadly, they don’t get comfort from a large bank account or an overflowing 401k, so maximizing their savings doesn’t get their full attention.

My quick response to this question is the exact opposite they want to hear.

AS MUCH AS YOU CAN, AND THEN 10% MORE.  But we have to run the numbers.  People spend more time planning summer vacations than planning their financial future.  So to get to your optimal savings amount we have to do the work.  And then from there we have to track and monitor it along  the way.   Things will come up in life, so we have to build flexibility into your savings.  More when things are loose and less when things are tight. But if we don’t run the numbers we are shooting in the dark.

What if something bad happens?

My response.

Bad stuff happens to everyone, expect it but do not overly prepare for it. There are 2 ways to financially protect yourself.  The first way is always having cash on hand.  The amount of cash depends on your situation.  3-6 months of EXPENSES is a good starting point and going up or down from there depends on what else is going on. How secure is your income and what other assets do you own?  These will factor in on how much cash you need to have.

The other way to protect is by buying insurance.  All different kinds– like, auto, homeowners, disability, life insurance, etc.  Insurance is something you will hate to pay for until you have to file your first claim. We have to blend cash and insurance together to see what the right mix of protection is good for you.   The more cash on hand the less insurance you will need to buy and vice versa…When bad stuff happens, we deal with it and keep moving forward.

Am I going to be OK?

I understand why people ask this question but I feel bad when someone asks it.  It makes me think that they are out of balance and not comfortable today and/or are worried about tomorrow. More than they should be…

My answer.

Of course you are going to be OK.

I know this for a fact.

How do I know this?

Because there is no choice.  What you do today will produce a result tomorrow.   You know if you are doing enough today or not.  So, if tomorrow comes and there isn’t enough money for the house, kids college, or retirement, it will be no surprise.

So, you will adjust.   You will have to adjust.   Humans adapt to their situation.   You might not like the situation, but you will be OK.  You will survive. Maybe you will have to work a little longer or spend a little less.  But you will be OK and I hope that with my help you will be more than OK.

These are the questions I hear. Have you asked them yourself? If so, its time you get answers that are specific to your situation.  Let’s connect and see what’s going on in your financial world.

-Jared S. Friedman CFP®