Personal-finance columnist Gary Brooks bids adieu with just a bit more investment advice

For nearly 16 years, I’ve shared personal-finance insights monthly in The News Tribune. Writing from the perspective of a practicing financial advisor, I have covered a broad range of topics. Since personal-finance education is mostly absent from our education system, even smart, successful people lack understanding of many core concepts of managing their money. Additionally, money often comes with emotion and behavioral biases that impact our decision-making.

The lack of knowledge and psychological element combine with the enormous sea of investment options, financial plan considerations, tax impact, estate decisions and more important topics to coordinate with your personal plans and preferences. Managing personal finances can be a daunting amount of work.

For a variety of reasons, this will be my last byline as a contributing writer. So, I’ll leave you with a series of quick but important ideas about the core financial security.

There is no one right way to invest

You don’t have to find “winners” to have a successful investment portfolio. In fact, chasing “winners” is likely to do more harm than good. Pick a strategy that fits two primary guides: 1) a projected investment return that supports the goals of a defined financial plan. 2) enough growth engine to build wealth beyond inflation, but not so aggressive that you will likely exit during market draw-down events that will happen.

When you let the tug-of-war between fear and greed dictate your decisions, changing from conservative to more aggressive positioning when your comfort grows, and back in the other direction when confidence wanes, you will find an approach that doesn’t work. Choose a diversified mix of investments, rebalance and stick with it until your life circumstances dictate a need to change.

Nobody plans to fail but many people fail to plan

Building an adaptable financial plan will increase the likelihood that you get to choose from preferred options in many phases of life rather than settle for default choices for the unprepared. Build a framework for your decisions by coordinating the many pieces of your financial puzzle (investment accounts, Social Security, retirement dates, expected expenses, “what if?” ideas, etc.). A financial plan is more than an online retirement calculator. There is no one number you need to reach to have retirement income security. Financial planning is an imprecise and ongoing process but one that will give you a solid foundation to make decisions from through a series of life transitions.

You can only spend after-tax dollars

You can improve after-tax investment returns and after-tax income by being aware of the tax efficiency of different types of investments, the tax character of various types of accounts you own, and income thresholds and deductions on your tax return. Achieving higher income or investment returns due to efficient tax decisions can be as productive as finding the “right” investments, especially because being tax efficiency doesn’t require taking on more risk the way seeking better performance might.

Protect things you can’t afford to lose

Most people are under-insured. Typically, this is the case in auto and home insurance, but it also applies to life insurance and disability insurance. While working, you need to protect your future expected income via life and disability insurance just as much as you need to protect your vehicle or house. Employer benefits typically fall short of adequate replacement of your income. Purchasing additional life and/or disability insurance may be beneficial. Fortunately, this is not an expense that most people need to carry into retirement.

Address your end with estate plans

Everyone can use a basic set of estate planning documents (will, powers of attorney for medical and financial matters, health care directive). That is unless you are comfortable with the judicial system making important decisions for you. Not only will this work bring you peace of mind, but it will also be a relief for your executor.

Be generous

It will make you feel good. Charitable donations can make a meaningful difference in your community and in the individual lives of people who receive support from non-profit organizations. There are many ways to make purposeful gifts (while living and by bequest) that create financial benefit for you. With some giving experience and seeing meaningful outcomes, you’ll realize that the financial benefits are secondary to the feeling that your money has made a difference for someone else.

There is no one-size-fits-all approach to financial decisions

They require personalization and integration across a wide array of topics and opportunities. When the subject matter exceeds your willingness to learn and act, there are professionals who can add value beyond their cost. Seeking conflict-free advice from a credentialed advisor could increase confidence in your financial security and decision-making.

Best wishes for your pursuit of a well-designed financial life.