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3 Steps to Financial Success

© Kirk Lindstrom

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Introduction - 3 Steps to Financial Success

The Baby Boomers' Quick Guide To Investing © Three Basic Steps to Success

ego cognito, ergo sum ("I think, therefore I am." Rene Descartes)

I am a Baby Boomer, therefore I invest. With all due respect to Descartes, investing for the future has, ironically, become one of the defining realities of our generation. Looking back at all the causes, the fads, the styles, and the experimentation with life we have gone through, the long trip may seem even stranger when we look at where we are versus where we have been. We've gone from Howdy Doody and Captain Kangeroo to Vietnam and Watergate. We've gone from a Missile Crisis to an Oil Crisis, from the Great Society and Haight Ashbury to a Kinder, Gentler Nation and a New World Order. Finally, in just the last twenty years, we've gone from an era of spending to an era of saving.

Yes, it seems our generation has been all over the map. But make no mistake. Where many of us are right now, is focusing on the movements of the Dow Jones Industrial Average and the Standard & Poor's 500 Index as we pour billions of our hard-earned dollars into 401(k) plans, retirement accounts, and personal savings. Quite simply, we are saving for our lives!

For many investors, the raging bull market of the 1990s (which really dates back to the summer of 1982) has proven rewarding to the say the least. As portfolio values continue to rise some investors have come to believe the laws of gravity don't generally apply to the stock market, and if they do at all it's only another temporary "buying opportunity." The joke on Wall Street is that an "oldtimer" these days is someone who knows someone who lost money once.

One drawback of any bull market, particularly the Great Bull Market of the 1990s, is that investors become complacent. Some even look upon the stock market as a "money machine." As Baby Boomers approaching retirement, we dare not fall into such flawed thinking. It's during such good times as we have seen over the past several years that planning for the future becomes even more important. Is your portfolio well-planned, structured with thought and care, and positioned to get you where you want to be through good times and bad? Or have you simply pieced your investments together on the advice of friends, family, and salespeople as you saw others reaping the rewards you desire for yourself?

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