More By This Author

Current Issue

Current Issue

Posted: January 23, 2012

The 6.5 steps of financial self-defense: Part 1

The first three

John Kyle

Have you ever taken a self-defense course before? Many people have. They learn to block, punch and kick their way out of a situation. I've studied and taught martial arts for more than 30 years; I've learned a lot and had the opportunity to use it as well (in competition, of course).

Yet in all that time, no one has ever taught me how to defend my finances.

So, as a martial arts instructor and a licensed and professional financial advisor, I do what I can to educate my clients, as well as my community, about simple steps that anyone can take to help defend their wealth for the long haul and grow that wealth at the same time.

I've developed 6.5 simple steps that help accomplish just that.

1. Be an Investor, NOT a Saver.

Most of us know that the majority of savings accounts give less a 1percent return on your money and inflation is almost 3percent. If we do the math you realize that you're actually taking more risk by not investing because you're guaranteed a loss. Simply by understanding that simple truth, you'll be more likely to get off the sidelines and back in the game and getting your money to work for you to help you reach your goals.

After the drop in the market in 2008, millions of Americans lost 30, 40percent or more of their wealth, and the biggest drop of all came in the way of investor confidence, we don't trust the market anymore. "I took my money out and haven't put it back." "I hear there's another recession coming, I think I should wait."

Well, I won't promise you that the stock market will have future challenges, but that's not the question to ask. The question is "what can you and I do about all of that?" What we can do is create and execute good, solid financial strategies that take into account the next few years and the next few months as well. You need to invest wisely and you need to have someone keep their eyes on what your investments are doing often in case you need to make changes.

2. Create a safety net

Another thing that became very apparent to many investors, is that when the market dropped back 2008, they had nothing to safe guard their investments. There was no safety net in place. That is actually one of my specialties: I use a method to help safe guard your investments so that should the market, or the stock itself decline in value, you will most likely not feel the effects as much as everyone else.

Think of it this way: every year you have to get insurance on your car, yet the car declines in value and there is nothing you do about that. With this type of method, which is called a PUT, helps with just that- a decline in value. If you're interested in learning more about creating a safety net for your investments, please contact me and I'll be happy to set a time with you discuss this as an option of wealth defense.

3. Set Clear and Realistic Goals

A big mistake investors make is that they never set goals properly when it comes to their investments. The two biggest mistakes made in regards to financial goals are not being specific enough and not being realistic.

Everyone wants enough money for retirement, yet if you ask someone what that number is, they have no idea. "A whole lot" is the usual answer. By working with an Advisor, you'll know just how much you'll need to reach your retirement goals as well as how to do that. You also need to balance out that number by being realistic at the same time. According to one recent survey, 36 percent of Americans say that they don't contribute anything at all to retirement savings. So how can someone realistically reach a retirement goal if they're not actually investing? Well, you have a greater chance of succeeding if you not only set a goal, but take action to get there.
{pagebreak:Page 1}

Since 1994, John Kyle has been a successful small business owner, an account executive with a national insurance company, and a sought-after business consultant for other small business owners. John is also a financial advisor with Morgan Stanley Smith Barney in Denver and specializes in creating safety nets for his client’s investment portfolios. Contact John at john.j.kyle@mssb.com or 303-595-2021.
 

Enjoy this article? Sign up to get ColoradoBiz Exclusives. The opinions expressed in this article are solely that of the author and do not represent ColoradoBiz magazine. Comments on articles will be removed if they include personal attacks.

Readers Respond

Leave a comment





Remember my personal information

Notify me of follow-up comments?

Please enter the word you see in the image below:



ColoradoBiz TV

Loading the player ...

Featured Video