What does people talking about money on the other side of the world have to do with your retirement? On the surface you might think, very little. The reality, however, is that if you are like most people than the answer is EVERYTHING.
Today most people are invested in assets that are heavily tied to global markets and emotion. When people on the other side of the world make serious moves, like recently happened with BREXIT than it has a dramatic impact on your retirement.
Today it is estimated that over 24 trillion dollars are tied up in market based investments. When the BREXIT vote passed it is estimated that over $3 trillion in account value was wiped out.
This cycle of chaos is not new for investors who are riding the market wave. And, unfortunately, BREXIT will not be the last shock to destroy your savings and your retirement if you are not prepared. Take a look at the graphic below indicating the BREXIT is simply the first domino to fall.
Source:Bloomberg, Electoral Commission, visualcapitalist.com
The way to build lasting wealth is not by taking more risk, in fact, it is accomplished by doing the exact opposite. The only way to minimize these type of losses and build your financial plan on a solid foundation is if you build your plan on stable predictable results. This can be accomplished by using what I call the Core Four.
The Core Four is a way to cut through all of the noise and hype associated with our financial markets today and focus on consistently making better financial decisions. One of the key principles of the Core Four is the need to have more control over your financial plan.
Sadly, many people were impacted by the BREXIT events simply because they do not have any control over their financial plan. Without control you have a plan that is based on hope. You hope that the market does not crash and that your money is there when you do retire. You hope that taxes stay low since they are likely differed to when you take retirement income. You hope that the fee’s in your market based account aren’t excessively high. The list of hopes goes on and on.
At the end of the day many people feel like they have their fingers crossed, their eyes closed, and are hoping for a positive outcome.
To learn how to build a plan that you control and to chart a clear path to your retirement and financial objectives watch the Financial Foundation webinar series here