Building Financial Resilience

So how can you be financially fierce in these uncertain times? 

Here is what I have learned after twenty years of investing in the stock market. 

You have to build your financial resilience. 

I was reminded of this after a conversation with my physician.

She was concerned that my blood pressure was elevated for the first time.

She looked at me very sternly and said, "In order to manage stress you need to build resilience."

In order to illustrate what she meant she used the formula for stress used in physics. 

Stress=Pressure/resilience 

She explained, "In order to build resilience to stress you must have balance in your life and combat life's pressures with nutrition, exercise, spirituality and social connections."

I had this AHA moment and shared with her that a similar illustration can be used to describe financial distress. 

Financial Distress=Volatility/ Resilience

Here is my prescription RX for building financial resilience. 

1. Have adequate cash reserves. Any funds that you need to have access to in the next five years should not be invested in stocks.
2. Have an asset allocation strategy. Your investments should be diversified by the types of assets: stocks. bonds and cash. 
3. Practice diversification. Make sure that you diversify within those asset classes by investing in small, medium and large cap stocks and stock mutual funds. You should also have different types of bond funds maturities; short; intermediate and long.
4. Find an investment tribe. Socialize with like minded people with similar financial goals and aspirations. 

I responded to my doctors advice by getting a Peloton bike for exercise and adopting intermittent fasting into my nutrition regimen. I considered it a wake up call and have committed to adopting a healthier lifestyle.

Similarly, when you increase your financial acumen you will adopt wealthy habits and gain the competence and confidence needed to overcome your financial fears during uncertain times. Are you feeling financially distressed in these turbulent times?

Register to attend the upcoming Financial Resilience One day retreat. Click here.

Deborah Owens is Founder and CEO of WealthyU. WealthyU creates financial wellness coaching and training programs for individuals and organizations. Would you like to host a lunch and learn workshop or webinar at your organization? Contact us at 240-583-1686 or by email at [email protected]