How do you track how you are doing?

Returns. This is what investors have “learned” to be important so they can judge how they are doing.

Returns may be a method to evaluate how your investments are doing relative to other investments. But that is a poor way to check how you are doing relative to your goal!

The above nuance is important so you understand just what you are measuring. It is also an important distinction to be sure you don’t chase returns and let your eye wander off the real target … your goal (such as, retirement).

Chasing returns is letting the investment tail wag the dog (goal). The below article discusses two types of returns so you are more aware of those distinctions relative to investments. However, just because you may be getting great returns, does NOT mean you are reaching your objective!

People not saving enough for retirement is often in the news. So … people want to compare themselves to what other people are doing. But … how’s that going to work when who you try to compare yourself to isn’t doing enough?!

This is why you need to determine specifically what you need to do relative to your goal … and then compare yourself to that you-specific goal every once in a while.

Now that you have the above perspective in mind, which is more important, returns or contributions?

 

 

About Larry Frank, Sr.

Larry R Frank Sr., MBA, CFP®, is an experienced financial advisor and a published author on Retirement Planning Research. Have a financial question? Click Here to Ask Larry

, , , , ,

No comments yet.

Leave a Reply

Are you human? Click the Grapes...