Part 2

Ignorance, we hear the word but do we really know what it means. To put it simply it’s a lack of knowledge, learning, or information. But maybe something a little more visual it can be described as blindness; a blindness that can be cured by simply opening your eyes.

This is where a financial advisor or simply reading books and articles can help. I will give you all an example. I met with a client about march of 2006, He wasn’t happy with the market and so he pulled his money out. The market in the last quarter of 2006 experienced tremendous growth and in the end he just barely called me up because he wanted to get back into the market. He lost money. He doesn’t understand some of the most basic principles of investing.

Buy low sell high. It is simple but the average investor usually does worse than the S&P 500. This is because of emotions and chasing returns. I get countless calls from clients telling me they want to sell because the price went down. I tell them buy more.

I also sale when everyone says buy and buy when every one says sale; within reason of course.

Another general rule of thumb has to do with dollar cost averaging. Buy more shares. During the accumulation phase what matters is how many shares you own and during the distribution phase it is the share price. The market grows the price goes up. In seventy years the price has always gone up. It is not of matter of if it is when.

So stop trying to time the market it is about time in the market. Get a Roth IRA it is the best deal the government will ever offer you and dollar cost average.

This is the first article in a series named “Roadblocks to success.” It is important to understand what stops our success and how to overcome those roadblocks. While every individual has different obstacles to overcome in his life understanding these 7 basic roadblocks are essential in order to initiate a change.

Lets look at these 7 obstacles:

1. No goals

2. Ignorance

3. Debt

4. Poor Investments

5. Inflation

6. Taxes

7. Procrastination

We’ve all hear that we need to set goals, most have heard the saying if you fail to plan you plan to fail. So lets start planning and setting goals. There are a couple a relatively easy steps to goal setting so lets just go over those.

Write it down, write it down, write it down. Simple, so do it.

There are 3 time frames for goals, short, mid, and long term.

Set goals short and midterm goals that will help you to meet your long term goals.

If you want to put a down payment on a house in 5 years set a short term goal of saving 200 dollars a month.

Last don’t get discouraged. Set goals that are easy to measure and specific. That way you’ll be able to see your progress. Also set goal that you can reach and track your progress.

As a side note make sure your goals will help you. Don’t set a goal of saving 200 dollars a month if you are already doing it. Set a goal of 250 a month. Goals are designed to make you feel better about yourself and to improve yourself for the better.

The two most important elements of any blog are of course the creator and the bloggers. So let me start by introduce myself and why I decided to create a finance blog in a cyber world with so many other blogs.

Obviously this post isn’t going to call the attention of the community but it will help me to but my goals on paper so to speak. But before we get into what this blog is going to be about I need to introduce myself.

I was hired by AIG financial advisors and I am now currently self-employed. I’ve been in this business for less than 5 years and as soon as I pass that 5 year mark I will be applying for a CFP certification. One of the requirements is that you need 5 years a experience. I am currently in the stage of growing my client base slowly but surely.

In my short time working as a financial advisor I am amazed at the ignorance and lack of knowledge that the average American posses about there finances. I am not sure if it is because they think it is hopeless or just don’t care about making it to a good retirement. Whatever the reason is my goal is to instruct the laymen and hopefully give some good insights to the more experienced investor.

The first posts I plan for the New Year is a series called, “The Roadblocks to Success.” It will be a seven part series discussing some of the basic stumbling blocks that we will all face in this New Year.

I say adieu until January 2^nd