Stop Guessing About Your Financial Future
Warren Buffett said, "Stop trying to predict the direction of the stock market, the economy or the elections." If you want to learn how you can build a stronger financial future by following his advice, keep reading.
Before we start ignoring market and economic prognostications it helps if we agree on why we are ignoring them. There are two types of economic models used to predict the future, simple and complex.
Simple models use a couple variables and make pretty charts for financial articles. These models are worthless because the real world doesn't boil down to two variables.
Complex models are run by computers using thousands of variables. Some problems with this are there are too many variables to model, variable selection is subjective, you can't know the possible ranges of the variables or the impacts they have on each other. What you end up with is a lot of work for a subjective model that might do a good job of predicting the past. This is worthless when you're investing for the future.
By worthless I don't mean guaranteed to be wrong. I mean no more likely to be right than wrong.
Knowing what we don't know is valuable knowledge. That's a tough sell for financial professionals so you won't hear it many places. (I'm counting on you preferring honesty and results to pretending I can see the future.)
By admitting we don't know the future we can start planning to make ourselves successful no matter what happens. We look at what could go wrong in the near term and set up protections through emergency funds and insurance. We look at what we need to accomplish in the long run and set up a plan to save and invest for those goals too. This is called financial planning.
When you stop wishing for the impossible, you'll be a step closer to achieving the great things in life that are possible.
If you like the idea of great things but need some help with your financial planning, give me a call. You might like working with me because while I can't predict the future, I can help you build a better one.
***Disclaimer*** Jake Carris Financial Planning does not sell any insurance or commissioned products. Investments are not guaranteed and contain the risk of loss. Speak to a financial advisor about your specific situation before making any investment decisions.