Investing With Simplicity. Reflections On Financial Planning.

February 6, 2007

Emily, the winner of the FinanceSpiration Challenge, emailed me her thoughts on the prize, a one-hour consultation with a financial planner. She shares the recommendations that Kristine made and her reflections on the financial planning process.

The financial consultation with Kristine was extremely helpful. She started by calculating a target number for my retirement savings, assuming that I retire at age 65. She said I needed to do two things to get to the target number: 1) Invest (not just save) and 2) Get a higher rate of return, between 8-9% per year on average.

Kristine advised me to move my company retirement plan out of the stable value fund and into a balanced fund consisting of approximately 65% stocks and 35% bonds. She said this fund is less volatile than all-stock funds and would allow me to get used to the risks of investing. The fund she recommended also has a low expense ratio.

Kristine recommended that I move my Roth IRA from my credit union to a mutual fund company, again investing in a balanced fund. She also urged me to sign up for the 403(b) plan at work, and to allocate my contributions to a balanced fund (instead of a stable value fund), again until I get used to the risks of investing.

I was surprised by the simplicity of her advice. When I’m done making these changes, all of my retirement accounts will be at one mutual fund company, and everything will be invested in one balanced fund. I thought it was going to be much harder than this!

Kristine said that once I get comfortable with investing, I will need to change the allocation to make it more appropriate for someone my age (early 30s). I will need to increase the percentage of stocks to 70-80% and add an international fund to get the percentage of foreign stocks up to about 20%. Kristine also pointed me to some great tools and articles at where I can learn more.

Thanks to Ben’s contest and Kristine’s excellent advice, I now feel like I have a plan and I’m on the right path to a secure retirement.

Thanks to Emily for sharing her experience and to Kristine of Beacon Financial Advisors for helping her out!


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Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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