Most people understand that having some sort of an estate plan is, as Martha Stewart would say, a “good thing.” However, many of us don’t take the steps to get that estate plan in place because we don’t understand the nuances between wills and trusts – and dying without either.
What do fine wines and financial portfolios have in common? Like a fine wine, quality portfolios take work. The best wines in the world are not made by accident. It takes time, planning, adaptation and perseverance to produce a top-quality bottle of wine. Likewise, there are a number of carefully calculated factors that come into play when it comes to creating a high-quality, perfectly balanced financial portfolio.
Here are just a few ingredients you need to make your investment portfolio a successful one:
Calculated Planning
Making a great wine starts with planning. The same is true when it comes to investing. With a vineyard, the process includes looking into the placement of the actual vineyard with respect to the sunlight, monitoring the soil quality, selecting high quality grapes, and implementing a good irrigation system. If something is not planned well in this stage, it can negatively affect the entire batch of grapes. When something goes wrong in this stage, it will most likely affect the entire harvest and not be something that can be fixed. Once, the quality of the grapes is damaged, the quality of the wine will surely suffer too.
Investment portfolios are no different. A lack of planning at the start can cause the output of your portfolio to suffer. Just like you wouldn’t plant a vineyard with no plan, it would be unwise to just invest in anything without knowing what the outcome will be. Planning investment portfolios requires knowing what your primary financial objectives are, which assets you want to invest in, what your required return is, the amount of time you need and what you have to start with. If you take the time to plan your “vineyard”, you’ll be well on your way to reaping the rewards of your well-thought-out plan.
Managing with Care
Even with the best roadmap, events that are out of our control are bound to happen. In farming, weather can be the biggest unknown. Going through a period of drought can drastically alter your crop, even after all the planning in the world. Other sudden events like fires, tornados, hailstorms or insect infestations can also have lasting and damaging effects on the fruits of your labor.
Investments, like vineyards, should be monitored and cared for all the way until the harvest, as investments too can be affected by external events. Some examples include the imposition of capital controls, changes in regulations, a severe financial crisis, or a major geopolitical event. As in the case of a vineyard, our portfolios can take a sudden and scary hit or go through a long drought that can impact our growing season. While we can’t control these external factors, we can deal with them as they come to make sure we don’t lose the entire crop.
Reaping the Fruits of Your Labor
The harvest and ensuing winemaking may be the best part of the winemaking process. The grapes are finally hand-picked, processed and fermented into wine. This is especially rewarding because you get to see and finally experience the fruits of your labor. After careful planning and management, the time that you’ve waited for has finally arrived. It’s time to sit back and enjoy the fine wine you’ve worked so hard to make.
Similarly, reaping what you sow in your investment portfolio is equally as rewarding. The time and effort you spent in planning and careful execution will eventually pay off, and you can enjoy the reward – whether it be retirement, sending a child off to college, or buying your first home. Investments, like winemaking, take discipline, care, and attention to detail. In the end, after all the planning and trials that you’ve been through, it will all be worth the effort.
While many wines get better with age, the same cannot be said for some irrevocable trusts.
Anyone with children or modest assets should seriously consider some minimal estate planning, but the increasing number of blended families underscores the need for proper estate planning. read more
One week ago on Friday, the unexpected happened: Britain voted to leave the European Union. The “Brexit”, as it was called, was a global market shock. Most experts thought the United Kingdom would vote to remain. The following morning major markets and currencies plummeted. Some markets had their worst one or two day drop ever. With fear running rampant, what are investors to do with their investments? Here are four time-tested tips to weather this storm.
Don’t Panic
During market downturns, people tend to panic and often make irrational, short-sighted decisions as a result. This may be because fear is a strong emotion that causes us to act quickly without using much rational thought. The problem is that when a lot of investors panic at the same time, markets drop fast and create more intense panic. Often this fear is not grounded in rational thought and investors lose out on long-term gains out of short-term fear. This scenario has played out many times before and it won’t be the last time we see a massive one-day market drop. Indices tend to eventually recover and resume their uptrend over time, so it is important not to panic and stay the course with your long-term investments.
Don’t Day Trade
Day trading may become more appealing to some investors because there can be a lot of money made quickly from the dramatic price swings. When investors let greed get the best of them, however, they might be unpleasantly surprised by the result. For the typical, long-term investor, day trading is both unwise and dangerous. It’s very difficult to correctly guess the direction that any one stock or market index will go, and if you’re not careful, you can lose a lifetime’s worth of savings in a short span of time, leaving you left scratching your head wondering what happened.
Diversify
If there’s one thing a global situation like this emphasizes, it’s the need to have a diversified portfolio. Investors should already have their money in many different types of investments. This includes investing in companies that operate in different industries but also different countries and regions. Diversification helps soften the impact of these types of market moves. The larger losses were realized in Asia and Europe, so having some other investments outside of those markets would have helped investors reduce their risk and their losses.
Keep a Long Term Mindset
Over the long term, markets tend to find support and resume their uptrend. The world has weathered many storms including world wars, the Y2K scare, the collapse of Lehman Brothers and other similar events throughout history. Each time there was a temporary crash that eventually subsided and markets gradually resumed their predictable upward trend. This time should be no different. The world will not end and the UK and EU will eventually work out trade agreements that benefit both parties. Likewise, Britain will not sink into a black hole. They will eventually stabilize their economy, profit again from trade and grow their businesses just like they always have over the course of hundreds of years.
While the Brexit was unexpected and scared plenty of investors worldwide, it isn’t a unique event that has never happened before. Although we may be in for a rocky road and a lot of volatility over the course of the next few months or even years, this market action will eventually subside and begin to march forward once again. The best thing you can do is to remain calm and remind yourself that you are in it for the long haul.
With the number of online and do-it-yourself (DIY) legal providers continuing to grow, some of individuals may be wondering if they could do their estate planning themselves. The advertising is seductive: attorneys use similar forms, the cost is significantly less than hiring an attorney, and many of these websites and kits are created by attorneys. In addition, most people think their estates are not complicated, and many think they are just as smart as (or smarter than) professionals. read more
Lot of highly intelligent people in an intellectually-oriented field (like science, technology, engineering, etc.) tend to be atheists i.e. they don’t believe in the existence of God. This is primarily because their understanding of the term “God” is usually limited to some super-natural being(s) sitting in the heavens controlling the universe – as portrayed in many religions. Any person of reasonable intelligence might question the validity of such an entity without any proof, so their disbelief is quite understandable.
One huge mistake they commit though is to equate spirituality with religion. Spirituality is about discovering the absolute Truth or Reality that underlies everything and answering some of the most fundamental questions regarding life and existence, like who am I?, what is the purpose of life?, where did this whole universe come from?, how can I experience enduring and lasting happiness?, etc. Its very inquisitive and experiential in nature. Religion on the other hand is generally a belief system built upon spiritual truths and evolved in a way that makes it easier for the masses to practice. Spirituality serves as the foundation for many major religions in the world like Hinduism, Buddhism, Christianity, Jainism, etc. It usually starts with someone – like the great ancient saints of India, Vyasa, Buddha, Jesus, Sankara, Mahavir, etc. – discovering and experiencing the Reality through meticulous spiritual practices. They then, out of their unconditional love and compassion, share how others may also discover the Reality for themselves and experience unlimited peace and bliss that gets rid of all miseries and sufferings in life forever. Large number of people tend to follow the philosophy and teachings of these enlightened beings closely for some time and lot of them are able to realize the Truth. But as time passes, with the original teacher long gone, it turns into a religion of blind faith completely hiding, and sometimes even forgetting, its underlying spiritual core. And, since many people don’t dive deep enough to learn the spiritual basis of religion, they take religion to be baseless and stop believing in it and leave spirituality also behind in the process. What a terrible loss!
Spirituality is the science and technology of our internal world, the world of our mind (our thoughts, feelings, experiences, memories, intelligence, ego, desires, aversions, tendencies, etc.). Even if you are an atheist, you are surely looking for one and only one thing in life – happiness. If you think about it, everything that you ever do is so that you can feel happy. And happiness exists in one and only one place – the mind. Just like we use mainstream science and technology to better understand and manage the external material world, we need to use spiritual science and technology to systematically understand and manage the internal world of our mind. Without that, its like groping in the dark searching for happiness in the external world and quite often getting hit in the head with various miseries and sufferings in the process. Its quite a pathetic state to be in.
Another common mistake is to equate mind and brain. Brain is a part of the physical body, an organ, that enables the mind to operate. But the mind is something subtle. We may cut open the head and monitor the brain as deeply as we like but we will not be able to tell a single thought, feeling, experience, memory, etc. of the person. We will only be able to correlate activities of the mind with activities in the brain. Hence the science of brain doesn’t serve as a science of mind. The latter needs a very subjective approach which is what spirituality provides.
One might raise a question as to why spirituality and not psychology? Various reasons. Psychology is primarily focused on curing mental illness (like depression, stress, emotional imbalance, etc.) and not on improving the well-being of a normal mind. A new branch of psychology called positive psychology has started exploring that front but its still in its infancy, whereas spirituality has been developed and practiced over thousands of years by innumerable people with incredible results. Moreover, psychology, like any other science, tries to understand the mind in an objective manner whereas there is a lot going on in the mind that is highly subjective in nature which cannot be objectified.
Although there are many spiritual philosophies and most of them can be quite effective, the best I have found is Advaita Vedanta. Its one of the most rational and comprehensive spiritual philosophies. Even some of the cutting-edge science like quantum mechanics, para-psychology, etc. is getting more and more aligned with what Vedanta has already been saying for thousands of years.
Here are few excellent videos that I highly recommend you watch to learn more about Vedanta and Spirituality in general. They shall be worth every minute of your time!
Please don’t let your intellect block you from diving into the wonderful world of spirituality. Instead, use the intellect as a tool to analyze and manage your mind through proven processes, and lead a much happier and fulfilling life. Innumerable highly intelligent people have been doing it successfully over thousands of years all over the world and so can you. I wish you all my best!
(This article was cross-posted from happinessjourney.net/post/146773002410/spirituality-for-atheists)
One area that is often overlooked in the divorce process is the need to update estate planning. Most people would agree that their ex-spouse is the last person they want to inherit their assets when they die—or to have that person make life and death decisions for them. But that is exactly what can happen – and often does – when these documents are not updated.
From time to time, it’s good to review why having a complete, up-to-date estate plan is so important. In addition to confirming our own actions, it can provide us with valuable information to pass along to friends and family who, for whatever reasons, have yet to act. So, here are five common estate planning mistakes to avoid.
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