7 Steps to an ABC Plan
1. Gather Your Most Recent Statements.
This will give you a better understanding of the big picture, rather than having a scattered idea of what you own.
2. Write It Down.
You can use our Asset Review Forms which will help you organize your thoughts before you see an advisor. You can write down your greatest concerns along with goals and objectives. Remember everyone has a “pebble in the shoe.”
3. ABC Your Assets.
Pretend every asset is moveable and changeable, then ask: If you could make a new plan starting today, what would it look like? Distinguish between your “investable” assets verses assets that are not (i.e. Rental Property). Remember there are three categories of assets: Yellow, Green, and Red. What percent do you need for cash or emergencies? That is your Yellow Money. What percent do you want in the market with either bond-type risk or stock-type risk? That is your Red Money. Finally, add the two percentages you just wrote down and subtract it from 100. The difference is your Protected or Green Money. Remember: Green Money rules reduce the risk in a portfolio.
4. Choose an Advisor.
This means you are serious about your planning needs and want a conservative advisor. Try to go to some of their events, talk to their clients if possible, use our questionnaire to ask them questions…once you are satisfied that they are competent and understand the ABC’s of Conservative investing, you can move to step 5.
5. Process, Process, Process.
Now is the time to work through a planning process with the advisor. If he is trained in the ABC’s then he or she is familiar with the steps of Investigate, Recommend, Implement, Review, and Adjust. These steps will help you challenge your fictional beliefs and work through your emotions while travelling down a logical path to financial success. The plan will come with two facets: overview and detail. You will want to understand the “big picture” of your plan while also digging into the details.
6. Review and Adjust.
Decide with your advisor a plan and review and adjust what meets your needs best. This will give you confidence and you will start to develop a “client partnership” with your advisor. Go to their events, bring friends, and start to talk them up if you are happy.
7. Sleep Easy.
You can actually enjoy a good night's rest knowing that your ABC plan has just the right amount of risk in it that only you can handle. It is your plan, not a Wall Street broker’s plan. Conservative investing is long-haul, core investing with just the right amount of risk tailored to your temperament.