PROPER!FINANCIALPLANNING! …



Financial Planning and Sailboat Racing

PROPER FINANCIAL PLANNING

AND SAILBOAT RACING: MORE

SIMILAR THAN YOU THINK

Risley Sams | risley@ | 10/10/2013

The America's Cup World Series was in San Francisco this August, and I was privileged enough to watch the spectacular event hosted on my home sailboat racing waters. These boats were fast and unforgiving and a complete joy to watch. As an avid sailboat racer and a Certified Financial Planner?, I wanted to share my thoughts on how a successful personal financial plan and a well- executed sailboat race are very similar. How often have you looked out on the Bay and seen casual sailors meandering around the bay? They don't seem to be going anywhere and sometimes even look a bit lost. Sailboat racers on the other hand have a plan and everything they do is tuned towards that plan. Investing with purpose with a well thought out financial plan is much the same as a professional sailor sailing a racecourse. The racecourse is your life plan (goals and ambitions) and the way you sail around the course is your investment strategy. Every sailboat race has a start and a finish and you can bet that all good skippers have a plan BEFORE they start the race. Also, due to changing conditions on the water, that plan may need to change and be adaptable. When investing with purpose, like sailboat racing, investors must have a plan that is straightforward and flexible. That plan must outline the investor's goals and develop both a financial plan for retirement and an estate plan to make sure when the race (life) is over, the next generation can benefit from the investor's sage planning efforts. Once the race starts, it is all about getting clear air, trimming your sails, and making tactical moves to avoid costly mistakes.

1

Financial Planning and Sailboat Racing 10-Oct-13

RHS FINANCIAL |

Unlike cruising, racing is a very defined sport and each person on the crew has a defined position. The two most essential crewmembers on a boat are the skipper (the investor) and the tactician (Financial Planner/Advisor). The skipper's job is to drive the boat, stay focused on what he is doing and the tactician is there to help execute on the best strategy. The tactician helps with the strategy by calling wind shifts, watching for currents, avoiding the mistakes that can cost the skipper the race. Similarly, a good financial advisor can add value to the investor by helping him or her create a plan, watching for market shifts, identify emerging market trends, and help avoid investing mistakes. The first part of a race is the start. All racers have a plan when they start--the race is not a leisurely cruise and a plan at the start can make the difference between first and last place. Once the race has started, the skipper goes upwind towards the weather mark. This is where the investor builds his/her wealth. Since sailboats cannot sail directly into the wind, they must tack back and forth and be the first boat to the weather mark. Similarly, investors cannot plan on making investments with linear returns, investing requires discipline and many tactical shifts along the way to your goal. This process of wealth accumulation is no trivial matter--strategies must be developed and mistakes must be avoided. This is where finding the right wind and current and sailing in "clear air" can make the difference between retiring and retiring well. Now that the investor has successfully navigated the upwind leg of the course and rounded the weather mark, the investor has built the majority of their nest egg. The investor must focus on continuing to grow that portfolio while concurrently protecting the position on the course. This leg of the race is called the downwind leg and this is where the skipper can gain on other boats but the emphasis is on protecting their position. For the investor, this leg is where compounded interest and taking a slightly more conservative approach is more important than accumulation. The final leg of the course gets extremely tricky once an investor rounds the leeward mark at the bottom of the course. This is retirement. The investor's portfolio now has to continue to grow and outpace inflation as well as supplement their income on your way to the finish line. This is perhaps the trickiest part of the race and execution of your strategy right now is the most critical part. All the work you have put in on the race comes down to this point. This is the true test of success or failure in your planning and execution of your plan.

2

Financial Planning and Sailboat Racing 10-Oct-13

RHS FINANCIAL |

RHS Financial is there to help you at every step of the way with your financial

planning and investment needs. Let us help you navigate the waters to success

and stop just investing and start investing with purpose?

About the author: Risley Sams is an avid sailboat racer and an active member

of the St. Francis Yacht Club and Staff Admiral of the San Francisco Bay Knarr

Fleet. He started RHS Financial after many years serving as a Financial Advisor

in several major brokerage houses before setting up his own practice. As an

Independent Financial Advisor (RIA), he takes the time to understand each of his

client's life goals and build a customized wealth accumulation and distribution

plan that fits their needs. Risley is a Certified Financial Planner?. He holds a

Bachelor's in Business Administration from California State University, Chico and

an MBA in International Finance from Purdue University.

Important Disclosures

RHS Financial and its opinions are subject to change given varying market conditions and the

relative time horizons and risk parameters of its clients. The strategies and performance is based

upon what we believe to be reliable and correct sources but cannot be guaranteed. The S&P

500? index is an index of widely traded stocks. Indexes are unmanaged, do not incur fees or

expenses and cannot be invested in directly. Past performance is no guarantee of future results.

Investing in sectors may involve a greater degree of risk than investments with broader

diversification. International investments are subject to additional risks such as currency

fluctuations, political instability and the potential for illiquid markets. Investing in emerging

markets can accentuate these risks. The information contained herein is obtained from sources

believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for

informational purposes only and is not a solicitation or a recommendation that any particular

investor should purchase or sell any particular security. RHS Financial does not assess the

suitability or the potential value of any particular investment. All expressions of opinions are

subject to change without notice.

3

Financial Planning and Sailboat Racing 10-Oct-13

RHS FINANCIAL |

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download