Guidance

RESOURCES TO HELP SHAPE YOUR FINANCIAL FUTURE

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Bradford M. Walker, CFP®
Senior Vice President
Wintrust Investments

If you live in the Chicago area, you are probably familiar with the phrase, “One Goal,” borrowed from the Blackhawks organization. Each season, they write it down, share it, and take the necessary steps to achieve their “One Goal” of winning the Stanley Cup. Do you have goals? Do you write them down?

Year-end is a great time to review your goals, measure your successes and failures, and set new goals for 2014. Winston Churchill said, “[h]e who fails to plan, plans to fail.” Goal setting is a critical part of planning. Setting goals and then simply writing them down drastically increases the probability of achieving success. Goals related to family, friendship, fitness, finance, and career should all be addressed annually. Consider sneaking away for 90 minutes over a long weekend, go to a coffee shop with only pen and paper (leave your phone/laptop at home), and write down one thing in each category.

In the financial world, we are constantly measuring success. To measure your personal financial situation, I suggest you address the following annually: savings rate, spending rate, debt level, tax planning, insurance coverage, and investment results. Ask yourself, “what can I do better?” Be realistic, start small and build off it. Focus on the two areas under your control: saving rate and spending. A savings increase of just 2% annually can significantly improve your future financial freedom. Often it is as easy as saving that bonus or applying a salary increase to savings. Automatic savings can be set up, and the money usually is not even missed. When addressing spending, recognize and try to eliminate consistent unnecessary expenses, as the small stuff adds up over time.

When reviewing investment performance, compare appropriate benchmarks or specific goals—and not what “the market” did, because you are likely not “the market.” Review what worked well and what did not, and make adjustments if necessary. If this is difficult or frustrating, a Financial Advisor can be a great resource for help. Regardless of market conditions, an annual performance review is crucial to ensure your investments are properly allocated and strike an effective risk/reward balance.

If you have not had a major life change during the year, a review of your insurance, debt levels/rates, and tax situation should be quick and painless. Ask yourself some realistic “what if?” questions and then make an educated decision with your advisors that deals with probabilities, not possibilities.

Finally, after your review, do not forget to set at least “One Goal” and write it down. Contact one of our professionals if we can be of assistance in helping you reach your goal.