Forbes

 

Take a Spring-Cleaning Approach to Your Investment Plan
By Saghir A. Aslam
Rawalpindi, Pakistan

(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)

An annual review and spring cleaning of your investment plan could help keep your overall plan and your long-term goals on track. Try these four steps.

For many of us, spring is a time to organize our homes and declutter our living spaces. While that spring ritual tends to focus on cleaning physical spaces, it also can be a reminder to tidy up the financial aspects of our lives. James Mosrie, senior wealth strategist for Wells Fargo Wealth & Investment Management, says making necessary tweaks to your investment plan is just as important as prepping your home for warmer weather.

Since personal circumstances and economic factors change often, updating an investment plan on a regular basis can help it stay in line with your long-term financial outlook. “Any change in life gives you the opportunity to assess where you are, adjust goals, or reprioritize what’s important,” In this guide are four tips for refreshing your investment plan this spring.

Schedule: Make time to make it happen

What it usually means: Spring cleaning your home is a big undertaking that may require several days or weekends to complete. It can have benefits beyond decluttering, so it’s important to reserve time for it. Failing to schedule time for a regular refresh could make the task more difficult when you finally do get around to it.

What it means for your finances: Just as you set aside time for household chores, set aside time to routinely evaluate your investment plan. Without this important step of scheduling time for the evaluation, you might be unaware of underperforming investments that could take your plan off course. Keep in mind, reviewing your plan may take more than one conversation and may involve multiple people, so map out a timeline that’s manageable and works with everyone’s schedule.

Your next step: Schedule time to take a deep dive into your finances — including times when you can meet with your advisors financial, tax, and legal advisors, as needed) for an in-depth review.

Assess: Identify what’s working and what’s not

What it usually means: When you clean, you obviously spend more time on areas that need extra work. It can help to do a walk-through to identify the areas that need extra attention before you begin.

What it means for your finances: It can help to do a similar walk-through of your finances with your advisors so you can get a full understanding of the condition of your plan and investment performance tracking with your circumstances and their goals.

“When you examine an investment plan, you want to take risk tolerance and time horizon into consideration,” someone who’s nearing retirement or who’s recently sold a business may not want to take much risk because they’re in a wealth preservation stage.

Your next step: Work with your financial, legal, and tax advisors to conduct a thorough assessment of your financial situation. Take a look at your income and expenses, evaluate investment and retirement accounts, and review other necessary documents to pinpoint areas for improvement.

(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale. Saghir Aslam has dedicated himself to social welfare activities since 1965 and serves as the founding chairman of Saba Homes, honoring and empowering orphans.)