7 Essential Tips for a Well-Designed Financial Life

This article was originally published in full on Tacoma’s The News Tribune on August 5, 2024. Gary Brooks was a contributing author for the paper from 2008 to 2024 and is a Partner and Senior Wealth Advisor at Mission Wealth in Gig Harbor, WA.

Managing personal finances can often feel overwhelming. With an endless array of investment choices, tax considerations, and estate planning issues, even the most successful individuals can struggle with core financial concepts. While personal finance education remains largely absent from traditional schooling, many of us face challenges in navigating these important topics—especially when emotions and behavioral biases come into play.

If you’re seeking more confident financial security, here are some essential ideas to help you manage your money and build a stronger financial foundation.

Investing Isn’t About Finding Winners

There is no single “right” way to invest, and chasing after top-performing investments often leads to more harm than good. Instead, focus on creating a strategy that aligns with two fundamental principles:

1. Ensure your projected investment returns support the goals of your financial plan.
2. Include enough growth to build wealth beyond inflation, but avoid being too aggressive, as this could lead to exiting investments during inevitable market downturns.

Stick to a well-diversified portfolio and rebalance it as needed based on changes in your life circumstances rather than shifting strategies based on emotions like fear or greed.

The Importance of Planning

No one plans to fail, but many fail to plan. A flexible and adaptable financial plan increases the likelihood that you’ll be able to make choices rather than being forced into decisions due to a lack of preparation. This plan should cover various aspects of your financial life, including investment accounts, Social Security, retirement timelines, and potential “what-if” scenarios. Remember, financial planning isn’t about hitting one magic number; it’s an ongoing process that provides a solid foundation for navigating life’s transitions.

Understand After-Tax Dollars

You can only spend what’s left after taxes. By paying attention to the tax efficiency of your investments and accounts, you can enhance your overall returns without taking on additional risk. Efficient tax decisions—such as choosing the right types of accounts or investments—can be as powerful as choosing high-performing investments and may lead to greater income over time.

Insure What You Can’t Afford to Lose

Many people are underinsured, particularly regarding auto, home, life, and disability insurance. Mission Wealth clients can take advantage of an Asset Protection Review, designed to help you understand current insurance coverages, identify possible gaps in coverage or areas for increased protection, and explore reduced premium expense opportunities. While working, it’s critical to protect your income with adequate life and disability coverage. 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 must carry into retirement.

Estate Planning is for Everyone

Having a basic set of estate planning documents—like a will and powers of attorney for medical and financial matters—is essential for everyone. Without these documents, the legal system could make decisions on your behalf. In addition to bringing you peace of mind, this step will make things easier for your loved ones and your executor when the time comes.

The Joy of Giving

Charitable giving isn’t just about tax breaks or financial benefits. It’s about making a real difference in the world and experiencing the fulfillment of helping others. Whether through donations during your lifetime or as part of your estate, giving back can have a meaningful impact on your community and the causes that matter to you.

Personalize Your Financial Approach

When it comes to financial decisions, one size does not fit all. Each person’s financial needs differ and require personalized integration across multiple areas like investments, taxes, insurance, and estate planning. If the complexities of financial planning exceed your willingness or ability to manage them, consider working with a credentialed, conflict-free financial advisor who can guide you toward greater financial security.

Mission Wealth’s Advisor Match Questionnaire

By understanding these key financial concepts, you can take greater control of your financial life. Remember, managing your finances isn’t about finding quick wins; it’s about building a sustainable, well-designed financial plan that supports your goals and adapts as your life changes.

Our team of experienced advisors is here to guide you every step of the way. To find a wealth advisor to help you build a personalized financial plan, take our Advisor Match Questionnaire today. Discover how tailored advice can make all the difference in achieving the future you envision.

ALL INFORMATION HEREIN HAS BEEN PREPARED SOLELY FOR INFORMATIONAL PURPOSES. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS. INVESTING INVOLVES RISK AND POSSIBLE LOSS OF PRINCIPAL CAPITAL.