As you build your nest egg, you will run into challenges. Markets go up and down. Big, unexpected expenses come into the picture. It’s normal for feelings of instability to accompany those challenges, but you can build resilience into your financial planning that can help you stay on track for your long-term goals.
What does building financial resilience alongside wealth look like?
1. Liquidity
Illiquid assets are a core part of many people’s portfolios. But in times of economic stress or volatility, illiquidity can be a source of strain. Having a liquidity plan in place can help you access cash easily when you need it without triggering unexpected tax consequences or selling assets you’d prefer to keep.
2. Portfolio Diversification
Diversification is a useful risk management and resilience strategy. Rather than relying on single winners — and risking significant losses if you’re wrong — a diversified portfolio can give you exposure to different geographies and industries.
3. Insurance
Insurance is another useful way to integrate resilience into financial planning. Coverage like life insurance, disability insurance and liability protection can offer peace of mind that unexpected events (e.g., a death in the family, a life-altering injury or a lawsuit) won’t have to eat away at your nest egg.
4. Financial Flexibility
A liquidity plan, diversified portfolio and insurance are helpful elements of a resilient strategy, but financial planning is an ongoing process. True resilience means being able to adapt over time. Financial flexibility can leave room to adjust goals and timelines.
5. A Resilient Mindset
Resilience is about portfolio structure, but it’s also about your mindset. Financial resilience can help you manage volatility without panicking and making reactive decisions.
Speaking to a financial planning expert can help you stress test your current plan. Questions about stress testing your own plan? Reach out anytime — help planning for the unexpected is a conversation away.
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Financial Planning may help your dreams come true! Simple, Smart, and Effective financial planning may help you build wealth. Our strategies and hands-on approach may help you increase savings, lower taxes, provide customized investment advice, help you secure your retirement and more. Together, we will help you build a plan toward making your dreams come true. Lance J. Johnson | ROI Financial Advisors, LLC CEO and Investment Advisor Representative 503.941.5925 e. Lance.j.johnson@roi-fa.com 14675 SW Millikan Way | Beaverton, Oregon 97003 |