Simple sketches that illustrate the path to wealth and financial happiness

You know the old saying about a picture being worth a thousand words? In the world of finance, you can probably make that ten thousand! The New York Times  columnist,  author, and financial planner  Carl Richards  has made a career out of exposing and analysing what he calls the “behaviour gap” – the gap between what you  should  do with your money and what you  actually  do. 

Richards has a knack for turning key investment principles into simple sketches to illustrate how improving your behaviour can help you reach your financial goals. Here are a few of our favourite sketches  that we use consistently with our clients. 

Sketch 1There are a limited number of things you can control, Richards says, and you don’t have power over everything that matters. It’s the important things you can control that should occupy your efforts. 

Sketch 2For those who lack the necessary time, knowledge and discipline to implement an investment strategy, a good adviser should be the thing between YOU and the BIG MISTAKE. 

Sketch 3 Years of research has shown that the average investor earns less (often much less) than the assets they are invested in. This “Behavior Gap is not simply about investors buying and selling at the wrong time; it is the psychological traps, triggers and misconceptions that cause investors to act irrationally. 

Sketch 4Your portfolio design is one of the things that matter. “A well-designed portfolio can be the difference between good investment outcomes and disappointment,” Richards wrote in The Times in 2013. The elements, like those shown below, should create one cohesive unit. 

Sketch 5 – The path between you and your financial goals isn’t a straight line. 

Sketch 6 If you stay focused on achieving your own financial goals instead of being side-tracked by what other people most value, you’ll get there.

Sketch 7Rather than falling into the typical market cycle … 
Sketch 8… keep following and repeating a process that actually works… 

Next steps

To find out more about how any of these measures may be of assistance in your individual circumstances, please contact Gordon Thoms or David Conte at Calibre Private Wealth Advisers on ph. (03) 9824 2777 or email us here. 

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax/or legal advice prior to acting on this information. Before acquiring a financial product a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product. The material contained in this document is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the Oreana Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document. Gordon Thoms and David Conte of Calibre Private Wealth Advisers are Authorised Representatives of Oreana Financial Services Limited ABN 91 607 515 122, an Australian Financial Services Licensee, Registered office at Level 7, 484 St Kilda Road, Melbourne, VIC 3004. This site is designed for Australian residents only. Nothing on this website is an offer or a solicitation of an offer to acquire any products or services, by any person or entity outside of Australia.

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