The Four Rules of Financial Security
Rule #1: Own Your Future
Recognize neither employers nor government
may provide the expected degree of support. Take the lead in
managing your balance sheet by creating a plan to protect against a
multitude of adverse events that will impact your future.
Rule #2: Focus On Reducing Risk
Reducing risk is more important than maximizing return. You can do that by diversifying your portfolio, purchasing insurance or taking a job with an employer provided pension.
Rule #3: Make Time Your Ally
Time is an ally if you take actions to protect against the negative outcomes of adverse events. You can proactively purchase insurance, compound investments over a long-term period and work longer to accumulate additional assets and forestall negative cashflow.
Rule #4: Master Change
Your life is not static. Neither is your financial plan. You must continually respond to events that occur in your life and revise your
plan, if needed. |
