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Discovering Yourself in Times of Crisis

January 2009
Discovering Yourself in Times of Crisis

It’s when the going gets tough that a person’s true character starts to show. Anyone can keep a calm and happy composure during times of exuberance, but it takes special skills to keep your nerves during times of crisis.

For many people, 2008 was a challenging year in the economy. Many people saw their savings and investments plummet; business was slow and jobs were scarce. We don’t know what 2009 holds for us, but I have discovered that you can learn a lot about yourself in times of crisis.

If you have found yourself in this “uncomfortable” place like many of us, you may want to pause and take some time for reflection and to reevaluate your financial and life strategies. As a financial planner, I recommend people do things that they are comfortable with when it comes to their money. When it comes to goal setting, I recommend you set goals that are a little out of your reach and that stretch your capabilities. Just as everyone likes to drink their tea a little different way, it is the same when it comes to your finances.

Some of the questions you should be asking during these turbulent times are:

1. Am I living beneath my means? Many people who are in financial difficulties right now are people who bought homes and took on financial obligations that they really couldn’t afford. Or they expected that their incomes would always be at the same level or higher. When times get tough, as they do from time to time, it is tough to carry all those obligations. If you are carrying too much financial burden, lighten your load as soon as reasonably possible.

2. Are my investments in line with my risk tolerance level? Many people never take the time to determine what their risk tolerance is. Meet with your financial advisor or go to some financial websites and take some small quizzes to determine where you fall in the risk tolerance spectrum. If you are in investments that are causing you to lose sleep and are affecting your health, look for alternatives that are more in line with your comfort level. It may mean you might have to take some losses, but your peace of mind and health should come first.

3. What is your fail-safe plan? We expect our economy to get better soon, but if there is an extended period of time when you may have to make do with what you have, how do you plan on reducing your expenses and overhead? There are many options you can consider and a good financial planner may be able to give you some good suggestions. There may be ways you can reduce your mortgage payments, reduce your insurance premiums and reduce your expenses during these times without having to take drastic measures.

All of nature is in cycles. Tides come in and tides recede; summer fades into winter; we experience good times as well as bad—and then usually good again. The same is true for stock markets, economies, your moods and the various stages of your lives. Keep your focus on your goals and live your days working towards what you truly desire. Make peace of mind your primary goal and remember, “This Too Shall Pass.” Nothing lasts forever. During times of crisis, we have to weather the storms of our lives and count our blessings more frequently. Here’s to wishing all of you a wonderful New Year! Make it your best year yet.

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