Page 76 - august2017lifeinnaples

FINANCE

STEPPING STONES TO
FINANCIAL

INDEPENDENCE

by Jill Ciccarelli Rapps, CFP®
Financial Advisor
F or most Americans, financial independence is an STAY INFORMED

important goal that motivates us throughout our
Given all of the stocks and
entire lives. Even though our personal ambitions
and goals may differ, we all share a common aspiration: securities available on the market,
it is important to consider the
generating enough money to live comfortably.
various factors that can impact
While many people think of work as a means to
your success as an investor.
achieve financial independence – earning a salary to pay
Understanding the current tax
your bills and provide a high standard of living for your environment, inflation and interest
family – the term takes on a whole new meaning as you
rates will be critical in order to
approach retirement. As a retiree, financial independence
create an effective investment
means that you are earning enough money from your
plan. In doing so, you will position
investments and other assets to live your desired lifestyle.
yourself to build a portfolio that
Becoming financially independent requires a long- is stable and resilient, even amid the fluctuations of our
term commitment and a cohesive plan that can lead you
economic climate.
towards your goals. Consider these “stepping stones” as
BE PROACTIVE, NOT REACTIVE
you continue your journey to and through retirement!
BE PATIENT Neither the bear market nor the bull market will ever
stay permanent; rather, the market is in a constant state
During your life, you will encounter many “get-rich-
of flux. When the market takes a turn for the worse, it
quick” schemes that promise wealth and success with can be difficult to focus on the long-term view – and
little to no effort. However, as you probably have learned,
many people end up making impulsive decisions that
very few people become wealthy overnight. Instead, the
are not in their best interest. For this reason, you should
most effective way to achieve financial independence is to
be wary of reacting to the natural ebb and flow of the
plan for the long term, stay committed to your goals, and
market. Instead, build a solid, proactive investment
make smart, stable investments. strategy and stay the course.
SPEND LESS THAN YOU EARN Of course, that is not to say that changing your
investments is off-limits; but adjustments to your
Each month, set aside a little money for savings before
investment plan should reflect careful planning and
you pay your expenses; in other words, pay yourself first!
analysis, not a spur-the-moment reaction to an emotional
The amount you save will vary based on your income
situation. By remaining calm, focused and logical when
and circumstances, but typically a 10-25% savings rate
assessing your financial situation, you will be able to
is a good goal to set (your financial advisor can provide
make smarter decisions that guide you towards financial
you with more clarity). Over time, your regular savings
independence.
habit will help you to develop resources for purchasing
investments; then, your money can begin to compound
and grow exponentially as you reinvest your returns.

76 Life in Naples | August • September • October 2017