Commentary by Joseph Clark
Do it Yourself (DIY) videos make challenging projects look so easy. But whether it’s a home improvement project or retirement planning, things are rarely as simple as they initially appear.
The nice thing about home remodeling is you can check projects off your list. You can also note any imperfections like paint that’s a shade too dark and decide whether to live with the color or re-do the project to your satisfaction.
But ask yourself this question: How do you notice a “mistake” on your 401k? Is it based on returns relative to a specific benchmark? Do your asset allocations “clash” with events occurring in the financial world?
Unlike a home improvement project, you can’t put a 401k on hold until you get around to resolving the problem. Nor can you “fix” it once and walk away. Investing is an ongoing process that requires regular monitoring along the way to retirement.
An article in USA Today reported that 63 percent of workers with 401ks manage their own investments. But Fidelity Investments found in a data analysis of 13 million participants across the country that 54 percent of such folks are not taking an active role in managing their 401k. That is much scarier than any home remodeling or decorating project gone askew! Even scarier is that most people don’t get around to implementing a process for what needs to be monitored or how to evaluate their investment management strategy.
Whether it’s home decorating or another special interest, most of us are passionate about our hobbies and so we invest time and money in these areas. In contrast, many individuals don’t pay enough attention to their finances because they don’t have a process in place for managing their accounts. Sure, they care about their investments, but they just haven’t “gotten around” to monitoring and managing these assets.
We all have different tastes. If you don’t have a flair for planning, find a professional experienced in investing. You can cover up a bad paint job, but you get just one opportunity to get your retirement “project” right.
Joseph “Big Joe” Clark is a Certified Financial PlannerTM and the Managing Partner of Financial Enhancement Group, LLC an SEC registered Investment Advisor. He is the host of “Consider This” found on WQME Saturday mornings at 9am and Shine 99 on Sunday’s at 10am. Joe also is a former Adjunct Assistant Professor at Purdue University where he taught the capstone course for a degree in Financial Counseling and Planning. Securities offered through World Equity Group, Inc., member FINRA/SIPC, a broker dealer and SEC registered Investment Advisor. Advisory Services can be provided by Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated and are not affiliated. Tax advice provided by CPAs affiliated with Financial Enhancement Group, LLC. Big Joe can be reached at [email protected], or (765) 640-1524.
