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FInancial planning for us. The importance of doing your homework.

Everyday I remind myself and my clients about how easy it is to loose money if we do not perform our due diligence before allocating money. The fool and his/her money are soon parted.

We can become masters of financial charts, wizzards of trading programs, and an eminence of market timing---but there is one more important thing, above all----that we can not predict as easy : human nature. http://biz.yahoo.com/ap/081215/wall_street_arrest.html

The world has changed---look at your portfolio. What do you see as a red flag today?

independent financial advisor

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Thank you for sharing this article.

Not only do we have to pay attention to our money managers, we also have to stay on top of them.

Thanks again!
So, how do we keep ourselves from falling victim to financial predators like madoff??
Happy Holidays Eddie and to all!

The reality is sickening. We can't prevent it. And since we can't prevent it, the next best step is to learn to put preventive measures in place to help us spot it and avoid it.

Take a look at your financial plan. This is your battle plan. For every goal that you have defined this plan should accomplish for you financially, there should also be a defensive play complementing it---- for example:

Let's go back into the past, just for fun.

Today is December of 2000. Person X is working on his/her imaginary financial plan.

I'm setting my first goal: retirement by 60

My goal is to retire from my "loyal company" which gives me wonderful employee benefits and all sorts of bells and fiddles by the age of 60. BUT if for some reason I get fired, downsized, or the company goes belly up, I want a secondary security blanket independent from my company.

So I can choose to setup two assets in my plan: a private pension plan and one of those life insurance policies that I can use while I am alive in my golden years to protect and build my wealth.

I work for Enron and my wife works for Washington Mutual bank. These are strong and good companies and we will retire with them.

End scene.

Let's go back to 2008. Today. They are older and closer to 60----BUT sadly not retirement.

So they lost their 401k's and their term life insurance benefits. But thanks to their secundary play, they also builded a private pension plan and a life insurance policy that complements their retirement away from their wonderful employer benefits.

we can't prevent crime, but we can plan for when it happens.
we can't prevent a car reck, but we can get insurance for when it happens.
we can't prevent our health's decline, but we can plan for when it happens.

Planning is a tool. Are you using it?

Humberto Dominguez
Financial planner


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