Between the upcoming presidential election and the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which became law in December, it’s easy to begin worrying about what 2020 will mean for your personal finances. We refer to these as exogenous factors. When your head starts to spin, though, remember to focus on the things you can control or endogenous factors.
Now, this can be difficult to do when all the “experts” are continually warning you about things that are completely beyond your control but fight the urge to start gazing into crystal balls along with them. Instead, think about your personal financial goals and how you can live the best life possible with the money you have, and simply ignore the extraneous soundbites.
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Outside Your Control: The Global Economy
The way the world does business is constantly changing, and 2020 will likely be no different. Factors like Brexit, tariffs, energy policy, trade disputes and more may cause changes to your portfolio – or, they may not! Generally in our opinion, these are the type of topics that large pension plans or hedge fund managers think about when it comes to investing. Truth be told, the impact any one factor will have on your assets is conjecture, so don’t let speculation change your focus.
Within Your Control: How You Make Money
We all have a unique relationship with our work, but not many people can say they love everything about their jobs. So, if you’re feeling unfulfilled and ready for something new, it’s completely within your power to make a change that better serves you. Even if you don’t change jobs, you can approach your existing work with a new mindset of gratitude for the opportunities it gives you to support the life and people you love. Or, maybe 2020 is the year you discover a side hustle you love that gives you more hope for the future. The point is, you can control quite a bit about how you make a living.
Outside Your Control: The Markets
When it comes to market volatility, the only constant you can expect is, well, volatility. Every year, something unexpected happens that sends the markets into flux. Whether it’s a natural disaster on the other side of the world or an underwhelming IPO, you can expect a few ups and downs in 2020. A presidential election is sure to spark reactions from investors, and it’s difficult to ignore market fluctuations completely, but don’t get caught up in what you can’t control.
Within Your Control: Your Long-Term Plan
There’s truth to the old saying that market volatility is just a tax that investors pay on wealth-building. In the long run, any disturbances in the market this year will register as a small blip on a continuing upward trend. Stay the course and focus on your long-term plan, rather than trying to time your investment choices with the day’s headlines.
Outside Your Control: Politics
To be fair, you do have a bit of control here if you choose to vote. Overall, though, politics will be politics. Candidates will float economic ideas designed to grab voter attention, but which consist mostly of hot air. Think back to the 2016 election – most of the economic plans peddled by candidates will never see the light of day. Although we have seen new tax and retirement planning laws passed in recent years, the economy is much bigger than any one elected official.
Within Your Control: Your Reaction to New Policies and Life Changes
Of course, new laws do sometimes impact our lives in ways we can feel. For instance, recent tax law changes have impacted how some people manage their charitable giving and tax deductions, and the SECURE Act may impact your estate planning.
At the end of the day, there will always be things outside your control that impact your finances. However, when you remain focused on the things you can control and predict, the better equipped you’ll be to roll with the economic and political punches as they come.
If you would like help with your personal financial planning, please reach out to Accruent Wealth Advisors for a complimentary consultation. Please call (336) 760-4829 or email us at firstname.lastname@example.org. You can click here to schedule your consultation today.