"everyone Has A Plan - Until They Get Punched." Mike Tyson

Mike Tyson was of course speaking about boxing, but where are many of us in the financial ring of life? A few weeks ago I wrote about Real Estate as an investment (please refer to previous post for a detailed breakdown), and the warning signs that should seem obvious. Sadly, there remains a lot of investors who still allow the facts to "get in the way." Regarding Tyson's quote above, the punches that many seem to be experiencing as of late are being landed in multiple combinations. Recent examples are of course the Real Estate bust over the past few years, job loss, and a rather large stock correction that bottomed in March 2009 (which brought the Dow down almost 8,000 points from it's peak).

Here's the thing about punches, you can be prepared, but you must be a contender if you are going to step into the ring. Many people fail to even train when discussing financial strategies. Rather, they invest with an advisor who then explains how losing 12% is actually a good thing. A recent example is this conversation with a neighbor. "My advisor said the Dow lost over 15% recently, and we only lost 12%." This LOSS is actually now being "sold" as a good thing, and sadly, the client by and large knods their head in approval at the borderline satisfaction of only losing 12% as opposed to others losing more. Half of my neighbors in Florida have spoken to me in this manner, so I'm not offering up a hypothetical conversation. Worse still is that most of them are already retired and need their assets to outlive them.....and it probably won't happen according to their "plan." In fact, I'm very sure it won't.

What is the right plan then? Well, for starters, take control of your finances and quit relying on many of the same avenues that are responsible for most of the financial ills that this country is currently suffering from (and will possibly suffer from even more in the next few years). Sadly, most "experts" on television who didn't even see the Real Estate correction coming (which was a certainty), are advising others that we are at a bottom in many markets. Start training now to explore responsible avenues for wealth and demand a better return on your investment. Empower your portfolio by taking an active approach to investment options that do exist.

I don't believe there is a "magic bullet" that's going to surely return things to normal - from an income dynamic, things won't be returning to normal for quite some time. Real Estate can go lower for a much longer time than many can imagine.....and so can stocks. Are you prepared to weather any financial storms, or will you learn what the term "glass jaw" really means when the punch comes? Start your personal training today by reviewing your finances. Are they diversified? Many investors have multiple mutual funds, but many of the funds are invested in the same companies, and in the same investment class.

There remain many "red flags" economically for the U.S., and sadly, I believe that the majority of investors who are counting on the old rules of thought regarding economy are going to suffer a big surprise. Start your training today to review your current investments, and explore strategies and diversification that is working for others. Stay alert - take control, because no one else is going to do it for you when/if the punches really start landing.