Live and Invest Confidently


by Jeff C. Johnson

In a recent post, I outlined a six-step approach to saving and building wealth. The last step in that process is “Have a Plan” and put it in writing.

If you are a Buckingham Strategic Wealth client, your written plan is called an Investment Policy Statement. This carefully constructed document spells out how your portfolio is to be invested. Used properly, it's valuable to professional advisers as the road map for managing their clients’ portfolios. As a client, it's a reminder of your goals. It keeps you in focus, especially during turbulent times.

What if you're not yet working with a professional fiduciary adviser?

You can still benefit from having a plan. Write your own Investment Policy Statement! Here's a sample of what might go into an Investment Plan, but you can write anything in your document.

Sample Saving and Investment Plan

I will save money every time I get paid or come into a cash payment, including gifts. To start, I will save a minimum of 10% of my earnings and other cash that I may receive. Initially I will be saving approximately $______monthly. Of this savings, I will direct half of the money to a cash reserve account until it reaches a balance of $______.

The other half of the monthly savings will be invested in a long-term savings plan in a low-cost, broadly diversified portfolio. These long-term investments can be held in my employer's 401(k) plan or my IRA/Roth IRA or my personal taxable account.

The reason for my saving and investing program is to build a solid financial foundation. A cash reserve will reduce financial pressures in my life. The long-term investment creates future opportunities for important purchases, such as a home, education for my family, and a future retirement.

Sign your name at the bottom and include the date for future reference.

My mentor, Dan Sullivan at Strategic Coach, teaches the following: Clarity = Confidence.

Formulate a personal statement about why and how you will save and invest. Write it down and read it once or more daily. Update and rewrite it from time to time as your life situation changes and live and invest confidently.

This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. The opinions expressed are the author’s own and may not accurately reflect those of Buckingham Strategic Wealth. IRN-21-2551