3 Things You Need To Know About Being a Better Financial Advisor

By Daniella Rand

You’ve worked hard to get where you are today. Becoming a financial advisor is not easy, after all, especially not for those who’ve gone the extra mile to obtain a Certified Financial Planner credential from the CFP Board. If you’re reading this, you’re likely well aware of what it’s taken to get this far.

Unfortunately, financial advisors do not have the luxury of a set-it-and-forget-it profession. Successful advisors undergo dozens of hours of continuing education each year and put in countless more unbilled administrative hours to keep their practices running smoothly.

Even so, many financial advisors struggle to gain traction: they have difficulty building or growing a client base, or struggle to retain the clients they’ve managed to attract. 

Those difficulties can be mitigated, in part, with old-fashioned personal and professional development. Indeed, financial advisors who do a few simple things (and do them well) tend to make out better than advisors who fail to take care of the basics. In this article, we’re going to examine three things in particular that all should keep in mind.

Daniella Financial

3 Things to Know About Being a Better Financial Advisor

These are three of the most important things financial advisors must keep in mind if they’re serious about improving their practice.

1. You Need to Know More About Your Clients Than You Might Think

You’ve chosen to go into a business built around client contact. You’re simply not going to succeed if you recoil from the conversations that need to happen for you to get to know your clients better.

Listening is critical here. As a financial advisor, you’re equal parts professional services provider and personal confidante. Your goal is to incorporate the personal, closely held information that your clients divulge into a comprehensive financial plan that keeps their best interests front and center. That means you’ll need to ask probing questions and listen — really listen — to the answers. 

2. You’ve Got to Be There When Your Clients Call

If listening is critical to success in this business, so too is availability. For better or worse, you need to be available when your clients call, especially after hours. At scale, you can task qualified subordinates with taking evening or early-morning calls, but as long as you’re practicing solo, the buck stops with you.

3. Communication Is Critical

Your clients need to know what you’re doing with their money, when you’re doing it, and why you’re taking any particular action. If you’ve done your job to communicate clearly, concisely, and in plain English, there should be no confusion. Learn your clients’ communication preferences — email, phone, video conference, face-to-face meeting, all of the above — and honor them.

There’s More to Learn About Being a Better Financial Advisor

Were these the only three secrets to success in this highly competitive business, the financial advisory industry would be even more crowded than it is. 

Of course, there’s far more to know about being a better financial advisor. Whether they’re just getting their feet wet or they’ve been in the business for decades, it’s important for every financial advisor to understand precisely what’s required to stand out from the pack — and to devote their working hours to doing just that.

5 Steps to Wealth Management Process

By Daniella Rand

How much do you know about the wealth management process?

Although every wealth management professional is different, and every pro worth his or her salt applies a proprietary “secret sauce” to the practice, the basic contours of wealth management are not some closely held secret.

Indeed, the wealth management process follows a well-worn path that, for many, includes five basic steps: prospecting, onboarding, analysis, planning, and implementation. Here’s what you should know about each.

Daniella Financial

1. Prospecting (Finding and Signing Clients)

You can’t manage wealth without clients, so prospecting comes before all else. Naturally, clients don’t see all the hard work that goes into marketing, lead generation, and pre-signing cultivation. But they can get a general sense of the process from what they do see: in particular, the 30- to 60-minute free consultation that most wealth managers offer prospective clients. (Many go even farther, offering multiple pre-signing consultations, but one 30-to-60 is a safe baseline.)

2. Onboarding (Gathering Data and Qualitative Information About the Client)

This part of the process involves gathering a host of quantitative and qualitative information about new clients. Advisors need this information both for their own administrative purposes and to incorporate into the next three steps. After all, the contours of a 20-something’s financial plan are going to be very different from those of a 60-something’s plan.

3. Analysis (A Comprehensive Look at Clients’ Financial Picture, Life Plan, and Risk Tolerance)

This part of the process demands a detailed look at the client’s current financial position, current investing strategy, earning potential, near- and long-term goals (including education and retirement plans), and investing risk tolerance, among other items. The analysis phase’s work product flows into the next phase: developing a financial plan

4. Planning (Developing a Financial Plan)

Developing a financial plan means different things in different situations. In a project-based planning scenario, a client may hire a financial advisor solely to produce a plan document that the client can then implement on his or her own. In other cases, the client may need help with specific planning goals, such as retirement or education. In still others, the client may need a comprehensive plan that touches on every aspect of his or her financial life.

5. Implementation (Where the Rubber Meets the Road)

In long-term wealth management relationships, this is the longest and most consequential phase, wherein the advisor implements the plan he or she has devised and ensures it remains on track.

Trust the Process, But Only If You’re Comfortable

The modern wealth management process is a well-worn one that’s served countless clients over the course of many decades. Iterative improvements notwithstanding, its basic contours haven’t changed much in living memory. Many thousands of successful, well-regarded financial advisors and wealth management professionals apply it every day.

Does that mean you, as the client, should trust the wealth management process without reservation? Most financial advisors would surely say that, yes, you can and should trust the process.

More sophisticated financial advisors, of course, know better than to give such unqualified advice. While the wealth management process described above works in the vast majority of managed accounts, it’s important for clients to go into the process with a basic willingness to trust it. 

If you’re not willing to do that, perhaps you’re in need of a different approach to wealth management. That may well mean a do-it-yourself wealth management program, which requires tremendous discipline and carries extensive risk.

Custom Portfolios 101: How They’re Built

By Daniella Rand

Your life isn’t a carbon copy of your neighbor’s. Your careers, homes, hobbies, families — they’re not the same.

So, why should you settle for the same cookie-cutter investment portfolio?

You shouldn’t, and you don’t have to. Designing and building a custom investment portfolio aligned with your family’s unique financial goals, personal values, and long-term strategic plans has never been easier. 

Here’s what you should know about custom portfolios and the work that goes into constructing them.

What Is a Custom Investment Portfolio?

Just as it sounds, a custom investment portfolio is a bespoke basket of financial instruments tailored to the unique needs and objectives of its holder — the client.

Depending on the client’s needs and objectives, custom portfolios typically contain a finely tuned mix of market-traded securities (such as equities and exchange-traded funds), mutual funds, fixed-income instruments, cash and cash-equivalent instruments, and perhaps alternative investments. High net worth individuals’ portfolios may contain a wider range of non-traditional investments not available to retail investors.

“Custom” does not mean “static”:

 

“Capable wealth managers routinely rebalance and fine-tune custom portfolios in response to new information, such as clients’ life changes, shifts in clients’ financial position or risk tolerance, market movements, and component performance.” 

— Daniella Rand

 

Building a Custom Investment Portfolio: How It Typically Works

Every wealth management team operates a little differently. That’s why choosing the right team for your needs is so important.

That said, most fiduciary wealth managers — those sworn to act in the client’s best financial interests, rather than merely adhere to the lower “suitability” standard — follow this general procedural outline to design, build, and manage custom client portfolios:

  • Learning more about client objectives. The first step is listening — really listening. To build a truly customized portfolio that reflects’ clients needs and values, financial advisors need to know more about clients’ lives, finances, deeply held beliefs and goals, and more.
  • Assessing clients’ investor personalities. The next step is assessing clients’ personalities as investors, which may be very different from their public personalities. Risk tolerance is a major component of this step.
  • Choosing assets. Next, financial advisors choose assets and portfolio weights that reflect what they’ve learned about the client. Look for financial advisors who choose best-in-class instruments with relatively low fees.
  • Monitoring performance. The work doesn’t end when the portfolio is fully built out. Indeed, a custom portfolio is never “fully built out” — its composition will change over time as clients’ needs, objectives, and tolerance for risk changes.

You Deserve the Best

Investors today operate in a ruthlessly fee-conscious environment. For clients, this is a good thing — never before have retail investors and high net worth individuals alike had such a wide range of high-quality, low-cost instruments to choose from. Put another way, the annual cost of a custom portfolio comprised of “best in class” instruments has never been lower.

This isn’t to say that the overall caliber of the financial advice and wealth management services clients receive is better than ever. In fact, clients looking to forge long-term wealth management relationships must closely scrutinize prospective managers’ investment philosophy and approach, track record (including relative performance over time in up, down, and sideways markets), and value-added resources. Working with a wealth management team backed by the resources and expertise of a global financial powerhouse like Bank of America and Merrill Lynch provides clients with a slew of advantages — not to mention, peace of mind.

Ultimately, the choice is yours. Just remember that you deserve the best financial advice money can buy. You’re worth it.

 

Daniella Rand is managing director of The Rand Group, a wealth management team based in San Francisco serving high net worth clients throughout the United States.

5 Skills You Need To Be a Successful Risk Manager

By Daniella Rand

The business of risk management is not for the faint of heart. It requires an unwavering commitment to a host of best practices developed over the course of many years, along with a number of personal and professional traits rarely found in the same individual.

The good news, for aspiring risk management professionals: Many of these skills and competencies can be acquired or learned with sustained practice. Let’s take a look at five that you may not even know you have — or, at the very least, simply haven’t had much of an occasion to exercise in your current role.

Daniella Rand

1. An Uncanny Eye for Detail

Risk management demands attention to detail. Not run-of-the-mill attention to detail of the sort expected in most white-collar professional settings, but an uncanny, uncompromising eye that catches what others miss. If you’re routinely lauded for your unusual ability to spot what’s just slightly out of place, you may possess this ability already.

2. An Above-Average Ability to Handle Pressure and Stress

How well do you work under pressure? If you thrive in a high-stakes environment with little room for error, you’re likely doing quite well on this measure. Because they’re often required to perform at their best when the situation is headed south, successful risk managers need to be able to think on their feet when others can’t.

3. A Strong Grasp of Financial Concepts and Risk

Risk management and a strong grasp of finance go hand in hand. Successful risk managers need to understand what constitutes acceptable levels of financial risk in a given situation, keeping in mind that “acceptable levels” vary widely by scenario. 

4. The Ability to Think Logically (Including Under Pressure)

Logical thinking is critical in the risk management business. There’s plenty of room for creative solutions here, to be sure, but it’s important to have a logic-driven bearing that prioritizes fact over feeling and empirical evidence over gut instinct. 

5. Strong Presentation Skills (And a Knack for Communication)

If and when you uncover a significant operational threat that must be addressed in short order, you’ll need to rely on your superior presentation skills to make the case to your superiors, colleagues, or clients. The same goes for less urgent threats, as well. The better your communication skills, the better you’ll perform as a risk manager.

Do You Have What It Takes to Be a Successful Risk Manager?

If you have these five important attributes, you can say without irony that you’re well suited to be a successful risk manager.

Does that mean you will find success as a risk manager? Not necessarily. Like any demanding profession, the risk management business is fraught with, well, risk. It requires the sort of dedication and commitment that many simply don’t possess. And, for better or worse, successful risk managers very often find themselves in the right place at the right time. Luck does play a role in this and every career.

Those caveats aside, aspiring risk management professionals who possess the building blocks described here would do well to actually give it a go in this business. For those with talent and drive, there’s plenty of room for growth — and a mark waiting to be made.

3 Tips Every Successful Wealth Manager Propounds!

By Daniella Rand

Successful wealth managers are a highly qualified bunch. It stands to reason that you should listen to what they have to say, at least when it comes to managing your own money and charting a course to a prosperous future.

Most wealth managers worth their salt tell their clients to cover a few bases from the get-go. Follow these tips in order and you’ll be well on your way to securing your family’s financial future.

Daniella Rand

3 Tips From Successful Wealth Managers

Successful wealth managers invariably advise their clients to follow these three tried-and-true money management tips. Are you following any already?

1. Get in Touch With a Seasoned Wealth Manager

First things first: get in touch with a seasoned wealth manager whose practice philosophy aligns with your own personal goals and risk tolerance. You don’t have to entrust every single financial decision your household makes to your wealth manager, mind you. But you absolutely want to have a steady hand at the tiller as your personal and professional lives grow more complex. Having a wealth manager in whom you have the utmost trust is crucial.

2. Get Comfortable Managing Your Own Savings & Setting Near-Term Financial Goals

Your wealth manager’s input is invaluable as you work to manage your long-term financial goals and stay on top of your investments. You, on the other hand, are more than capable of managing your own savings and near-term financial goals. Speak to your wealth manager about taking charge in this arena; they should be more than happy to give you a crash course.

3. Keep Close Tabs on Your Investments’ Performance, and Don’t Be Afraid to Have Tough Conversations With Your Wealth Manager

If you’re serious about brokering a long-term relationship with your wealth manager, you need to be prepared to monitor the performance of your investments and bring any concerns you might have to your advisor’s attention. Don’t shy away from frank discussions around performance; if your expectations aren’t being met, you have every right to say so.

Monitor Like a Boss

It’s worth re-emphasizing this last point. As the old saying goes, “You can’t manage what you don’t measure.” If you’re serious about managing your own finances in close cooperation with a seasoned financial advisor, it’s on you to ensure you’re monitoring the performance of your investments and the security of your liquid savings.

This isn’t rocket science, of course. Monitoring your savings and investments is a matter of discipline and attention to detail: two traits that plenty of successful people have. 

Likewise, it’s important that you feel comfortable bringing the results of your ongoing monitoring activities to the attention of your financial advisor, who must also be carefully monitoring your portfolio.   A good advisor will happily listen to what you have to say and work with you to tweak your financial plan, should circumstances require it. If at any point you feel as if your concerns aren’t being heard, think seriously about taking your business elsewhere. Your financial future is too important to entrust to an advisory partner in whom you have less than the utmost confidence.

3 Reasons That Will Convince You To Learn Finance Management!

By Daniella Rand

If you’ve got a knack for numbers and an intuitive understanding of market forces, you may well be a good fit for the finance management business. Are you willing to do what it takes to earn your finance degree?

Only you can answer that question, of course. And there’s no use pretending that the road ahead won’t be daunting. But that shouldn’t stop you from taking a glass-half-full view of that road. If you’re willing to look for them, you can find plenty of good reasons to choose a career in finance.

Daniella Rand

3 Compelling Reasons to Learn Finance Management Today

Not sure where to look first? Consider these three compelling reasons to pursue your career in finance management today.

1. You’ll Have a Wealth of Career Options at Your Fingertips

Individual financial management professionals have no qualms about specializing, but the field itself boasts endless diversity. No matter what your professional and personal strengths, you’ll no doubt find a career path that lines up with them quite well. Whether you’re more comfortable crunching the numbers in the back room or shaking hands with prospective clients out front, there’s a line of work with your name on it here.

2. Your Degree Will Carry a Ton of Cachet (And You’ll Be Compensated Commensurately)

Let’s face it: a finance degree is a coveted certification. Even if you’re not the sort to go into a particular line of work because of what it’ll do for your reputation, you simply can’t ignore the fact that financial professionals are, by and large, quite well compensated. 

3. Your Services Will Always Be in Demand, Even as the Industry Changes Around You

Anyone who tells you the financial management industry will look precisely the same in 10 years is not being straight with you. Like so many other sectors of the economy, wealth management is changing rapidly. Those committed to its practice must do what they can to keep pace.

Fortunately, credentialed wealth management professionals don’t have to worry about obsolescence anytime soon. Demand for hands-on finance management remains high, and for finance managers willing to leverage technology to render their practices more efficient, the future looks far brighter than the past.

The real question is: Do you have what it takes to keep up? If you can answer in the affirmative, you’ll find wealth management a rewarding career.

Ready to Up Your Finance Management IQ?

If the foregoing sounds like precisely what you’re seeking in a career, you owe it to yourself to enroll in a financial management program and begin the admittedly long, strenuous process of earning your wealth management credentials. If and when you emerge victorious at the end of your journey, you’ll find open road ahead.

And if you’re not convinced that finance management is right for you? Don’t despair. Despite rampant change, the broader financial services industry remains open to ambitious folks willing to put in long hours and pay their dues. You will find your place in this business, even if that place isn’t precisely what you envisioned at the outset.

Effective Tips For Risk Management

By Daniella Rand

Managing risk is few upwardly mobile professionals’ idea of a good time. But it’s arguably the most important aspect of project management. In the sporting world, it’s said that defense — not offense — wins championships. Substitute “defense” for “threat mitigation” and you’ve got a ready-made slogan for business, too.

Of course, knowing that you need to anticipate and parry threats before they mushroom is one thing. Effectively doing so is quite another. 

Fortunately, risk management isn’t rocket science. Even if you’re not the most careful person around, it’s well within your capabilities.

Daniella Rand

6 Effective Tips for Better Risk Management

As your next project gets underway, try out these six effective tips for better risk management.

1. Conduct a SWOT Analysis Before You Begin

Before your project kicks off, conduct a thorough SWOT analysis to set a baseline risk posture. “T” is indeed for “threat,” but the goal here isn’t just to identify the risks you’re most likely to encounter. You’re also looking for hidden opportunities — and, in this framing at least, “O” comes before “T.”

2. Assign a Process Owner (If It’s Not You)

In more blunt terms: Figure out where the buck stops if and when it all goes sideways. The hope is that things never get to the point that someone needs to be held accountable, but fortune does favor the prepared.

3. Give Non-Owners Narrow Domain Authority

For practical purposes, the ultimate process owner won’t have direct responsibility for every moving part of the project. Make sure roleplayers have some skin in the game as well — and are intimately familiar with the biggest risks facing their remit.

4. Rank Discrete Threats By Probability and Severity

Zoom out and rank the threats you’ve identified by the relative likelihood that they’ll actually occur and the severity of the risk they pose to your project. Where it’s not possible to assign a precise value, educated guesses will have to do.

5. Assign Mitigation Resources Accordingly

Your team can’t be everywhere at once. Based on the numbers you’ve crunched, assign mitigation resources where they’re most likely to be needed — without completely shortchanging risks with a low but non-zero chance of occurrence.

6. Develop Best-, Middle-, and Worst-Case Scenarios for All Realistic Threats

For each realistic threat, develop three distinct scenarios: a best-, middle-, and worst-case. Those with a laid-back temperament might be inclined to assume the best and resist preparing for the worst; those predisposed to catastrophizing may do something like the opposite. Your goal is to strip away the emotional aspect of threat preparation and go where the facts take you.

Pick Your Battles, Control Your Exposure

These risk mitigation tips will help reduce your organization’s exposure to knowable risks, and may well make the difference between a particular project’s success or failure. But let’s be clear: They won’t completely insulate you from downside risk. Nothing can.

Nor can these tips guarantee that you won’t face “unknown unknowns,” those dreaded threats that by their very definition are not within your power to anticipate.

Between now and the (hopefully) successful completion of your project, you’ll endure plenty of moments of high drama and suffer through more than your fair share of sleepless nights. You owe it to yourself to pick your battles, control your exposure, and keep looking on the bright side, even when things seem their darkest.

What Are The Vital Steps To Become Rich?

By Daniella Rand

What are the vital steps to become rich?

It sounds like a reasonable question. But is it on base?

The short answer is, not exactly. A more appropriate question to ask might be: What should I do to begin building wealth today?

The short answer to that question is, quite a bit. But let’s not put the cart before the horse. If you’re serious about creating real wealth for yourself and your family, you’ll need to take care of the basics first.

Daniella Rand

6 Steps to Build Wealth (And It’s Never Too Early to Start)

No matter how modest your income or how crushing your debt burden, building generational wealth is not out of your reach. Here’s how to get started and stay on track.

1. Set a Realistic Savings Goal and Stick to It

First, set a realistic savings goal, expressed as a percentage of your take-home pay, and stick to it. This will probably necessitate the creation of a household budget or spending plan, if you don’t have one yet.

2. Set Up Tax-Advantaged Investment Accounts, Even If You Can’t Max Out Your Contributions Yet

Don’t yet have an IRA? Set one up today and fund it with an initial deposit. Even if you can’t afford to contribute up to the annual limit imposed by the IRS, anything helps.

3. Familiarize Yourself With the Basic Principles of Investing

You don’t have to sit for your Series 7 exam or anything like that, but you’ll benefit from a basic understanding of fundamental investing concepts. As your confidence grows, you’ll utilize these concepts in your own practice, or keep tabs on your wealth manager as they do so on your behalf.

4. Find Your Tolerance for Risk

Next, assess your tolerance for market risk. If you’re dispositionally conservative, you’ll want to be overweight fixed-income instruments for your age; if you’re a risk-taker, you’ll be more comfortable with a portfolio that’s overweight equities.

5. Connect With a Wealth Management Professional Who Actually Gets You

Conversations about risk tolerance are best had with a wealth management professional, by the way. Find one whose personal style and investing philosophy align with your own.

6. Lay Out Your Long-Term Career Plan (And Look for Opportunities to Boost Your Income Along the Way)

Making the most of the money you have today is only part of the equation. You’ll also need to make the most of the money you’ve yet to earn, and to take every reasonable step to increase your earning potential besides. Your career plan is fundamental to this goal, as are any moves you can make to boost non-salary income.

Begin Your Wealth-Building Journey Today

It bears repeating: Wealth is in the eye of the beholder. “Rich” is an inherently subjective term. And net worth tells only part of the story.

If you’re the sort who’s never going to be satisfied with terms like “comfortable” or “just enough,” your wealth-building journey will look very different from the path trod by your more laid-back compatriots. That’s okay. Your personal conception of wealth is the only one that matters. Let others make their own way; you’ve got enough on your plate as you focus on number one.

Why Everyone Must Get A Retirement Plan?

By Daniella Rand

Do you have a retirement plan in place?

If not, don’t feel bad. You’re missing out, but you’re not left behind. Millions of Americans are in the same exact position.

Still, it’s high time you did something to address this gap in your financial posture. Here’s why you need to get a retirement plan together this year.

Daniella Rand

1. You Can’t Rely on Your Parents’ Money

Let’s get this one out of the way: The vast majority of everyday Americans can’t count on a life-changing windfall to bail out their profligacy (or reticence to plan). Even those who did have the good fortune to be born into privilege can’t count on actually receiving the inheritance to which they assume they’re entitled. 

Remarriage, out-of-control spending, poor financial planning, criminal activity — all these things and more can jeopardize what appears on paper to be generational wealth.

Your parents always told you to look out for number one, and that you shouldn’t rely on anyone else to act for you. Take that advice to heart and secure your own financial future, without their help.

2. You Can’t Count on Social Security (And It Might Not Be Enough, Anyway)

Despite its reputation as the “third rail” of American politics, the Social Security program’s long-term solvency has been in question for years. If you’re still in the first half of your career today, you may not want to rely on Social Security benefits to fund your retirement income shortfall. 

3. You Probably Don’t Have a Great Pension

Most employers no longer offer pensions to new employees, and those that do tend to be less generous than their predecessors. If you work in the public sector or belong to a trade union, you may be in a slightly better position. But, as a general rule, you should treat your pension as you do your (expected) Social Security entitlement: as a bonus to the retirement income you’re able to guarantee through other means.

4. Inflation Is Inexorable

Recently, we’ve been fortunate to live in a fairly low-inflation environment. Prices continue to rise appreciably, but not at the breakneck pace that those of a certain age can recall from the 1970s and 1980s.

Unfortunately, there’s no guarantee that this condition will endure. The future may well hold another extended period of high inflation, spelling trouble for those without a plan to counteract it.

5. Your Needs Will Change Over Time

Your future income and expenses will change. Having a retirement plan in place ensures you’re able to keep up with those changes and adjust as necessary, especially if a major unforeseen expense suddenly presents itself.

Your Future Is Too Important to Squander

Laying out a retirement plan is one of the most important steps you can take toward financial independence.

This isn’t hyperbole. It’s borne out, again and again, by empirical research. 

Your future prosperity, and that of your closest loved ones, may well depend on whether you’re able to engage in meaningful financial planning before retirement is imminent. That’s an awesome responsibility, and a sobering reminder that the future is a terrible thing to waste.

You Can Never Be Sure About Your Future

By Daniella Rand

No one truly knows what the future holds. Anyone who tells you otherwise probably has something to sell.

We’re not flying blind, however. In our personal and professional lives, we can make educated guesses about the risks and opportunities we might face now and tomorrow. Using what we know about probability and the unique mix of factors that we bring to the table, we can at least begin to determine the likelihood that any particular scenario will come to pass.

Unfortunately, those scenarios aren’t always welcome. However unlikely in any individual case, the six situations described below cumulatively affect millions of American families, always with adverse financial consequences. How are you preparing yourself and your family, should the worst happen?

Daniella Rand

An Unexpected Medical Expense or Disability

Serious medical issues can and do affect otherwise healthy individuals. Sometimes, these issues are more or less discrete — perhaps a short hospital stay followed by a period of rehabilitation and a resumption of more or less normal activity. Even that relatively upbeat scenario may bring overwhelming financial strain.

Extended periods of illness or disability can do even more long-term financial damage, especially when the afflicted individual is unable to work on a semi-permanent basis. Disability insurance can mitigate income loss, but it may not be enough to keep your financial plan on track.

An Extended Layoff That Threatens Your Long-Term Earning Power

A long period of unemployment can threaten your long-term earning power as well, especially if it lasts long enough to erode your skills and render you less than marketable. That could precipitate a vicious cycle of underemployment.

A Tragedy That Affects Your Family’s Finances

The premature death of a breadwinner is too awful for many to contemplate, but the downside risk is too great to ignore. Early in your career, your savings won’t be sufficient to replace this permanent loss of income; life insurance is a critical backstop.

Insolvent Entitlement Programs and/or Private Pensions

Forces beyond your control may conspire to sap your later-in-life income — namely, the looming insolvency crisis that many believe threatens Social Security and Medicare. If you’re relying on Social Security for the bulk of your retirement income, for instance, you may want to think about adjusting your long-term plans.

Health Problems That Force Early Retirement 

Even in the absence of an acute health crisis later in life, health problems could still sidetrack your career. Later in life, when your body is less resilient and your resume less attractive to prospective employers, even temporary health issues are deadly serious — in the worst case, effectively forcing you into retirement. 

Lengthy Long-Term Care Needs

Most people yearn for long life, but at what cost? If you require long-term care due to cognitive decline or infirmity, you’ll need to part with a huge chunk of your nest egg. Your erstwhile heirs may be hardest hit.

What Else Keeps You Up at Night?

As you look to the future, ask yourself: What else is keeping me up at night? And what can I do to prepare myself for these unpleasant eventualities? You might not have a crystal ball, but you do have the power to improve your financial resilience.