By Eric Reich
Fun fact you probably didn’t know about me: I was a self-defense instructor way back when I became a black belt over 20 years ago. Over the years, I have realized that there are so many parallels between self-defense and life. Frankly, I’m surprised it took me this long to write about them. This week, let’s look at the ways that financial planning/investing and self-defense are alike. Maybe you can learn a little more about both subjects.
- The best way to not get hurt is to not be there in the first place.
In self-defense, this concept is pretty easy. While trouble can sometimes find you anywhere, in general, if you don’t want to get hurt, don’t be in the places or situations where you are most likely to get hurt. If you are in an area known for high levels of violent crime, you are more likely to be a victim of violent crime. Not rocket science, right?
The same goes for investing. If you don’t want to potentially lose a large percentage of your investments, then don’t invest in super high-risk investments. Only take on risk levels that are appropriate for your financial situation and stick to areas that you are comfortable with regarding your personal safety.
- Be aware of your surroundings.
Never walk around with your head down or buried in your phone. Instead, have your head up like it’s on a swivel. Look around at what is going on around you. Does something not look right? A person or a place that concerns you? I always sit in a restaurant or bar with my back to the wall and facing the door. I want to see every single person who comes through the door to notice any potential threats.
In investing, look at how the markets are performing. How is the economy doing? Are there any potential threats to good market performance? Just make sure you can differentiate between the real threats and irrational ones.
- Have an alternative or an exit strategy.
When I sit in a public place, I observe every possible way to exit that place. Every door or window is a possible exit. Even the kitchen, which isn’t normally an exit, can become one in an emergency.
Likewise, your financial plan needs a contingency. Assume something that is not currently visible will come along and disrupt your plan. What is your alternative? Knowing this can help relieve a lot of stress when something unexpected comes along. And it will, we just don’t know what or when. Just be prepared.
- You are responsible for your own safety.
In an age of nobody assuming personal responsibility for anything lately, your safety is something that you are wholly responsible for. I understand that threats exist in this world, and it’s my job to eliminate as many of them as possible. You can hire a professional, or do what everyone else is doing, but at the end of the day, you need to understand and take an active role in your money. It is, after all, your money.
- You can never be too prepared.
As the saying goes, the best way to make peace is to prepare for war. I’d like to think I can talk my way out of almost any bad situation without a physical conflict because that’s what I’ve been trained to do. However, at the end of the day, if something goes wrong, I’m absolutely confident I’ll be the one left standing.
In retirement planning, you prepare for the day you intend to finally retire. You can’t be over-prepared for retirement. You might need more money than you thought. You might live longer than you thought. You might spend more than you thought. Prepare so much that no matter what happens, you are ready and your retirement can withstand any obstacle that it faces.
In financial planning, like self-defense, preparation is key. Planning for the unexpected makes life a lot easier or safer when the unexpected happens.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Reich Asset Management, LLC is not affiliated with Kestra IS or Kestra AS. The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation. To view form CRS visit https://bit.ly/KF-Disclosures.
Eric is President and founder of Reich Asset Management, LLC. He relies on his 25 years of experience to help clients have an enjoyable retirement. He is a
Certified Financial Planner™ and Certified Investment Management AnalystSM (CIMA®) and has earned his Chartered Life Underwriter® (CLU®) and Chartered Financial Consultant® (ChFC®) designations.
