Commentary by Annie Wilson, Vanguard Senior Behavioral Scientist
Can you handle unexpected costs? Do you overreact to market volatility? What is your vision for your financial future?
The answers to these questions can help you analyze the state of your financial well-being – from how you cope with economic stress to how you respond to a developed economy and a bullish stock market.
You do not have the permission required to post. This is an essential feature of yours Overall Mars is what it is Is Financial well-being, right?
For many people, being financially well-off means being in a “never” state. Never Feeling financial stress or anxiety; Never Feeling challenged financially. In short, always be happy to be satisfied with their financial situation.
However, financial well-being should not mean the complete absence of financial anxiety or uncertainty. Stressful moments will come in everyone’s life. In fact, some financial worries can motivate you to work. Challenging yourself to achieve higher financial goals can be exciting and rewarding!
Instead, financial well-being means a strong enough foundation and a clear financial strategy so that risks are more tolerable and financial adversity and health risk taking are less frightening.
. . . Financial well-being means having a strong enough foundation and a clear financial strategy so that risks are more tolerable and financial adversity and health risk taking are less frightening.
Consider how authors Emily and Amelia Nagoski describe wellness: “Being well does not mean being in a state of lasting security and tranquility, but returning to a safe and peaceful state from adversity, risk, adventure or excitement. And out again.” *
Financial well-being is much more than having a specific plan for personal financing and investment. Understanding how that plan fits harmoniously and dynamically into the context of your life.
So how do you maintain and maintain good health? You can build a sustainable foundation for financial well-being by applying 4 key pillars to your personal financial improvement: focus, balance, calm and motivation. Let’s explore each one.
An attentive investor sets clear goals
Do you have specific financial goals and plans to achieve them, or are you delaying rather than risking financial work? Maybe you’re a good saver but you don’t have clear goals in mind, or you have goals but lack the motivation or knowledge to achieve them.
Being a centralized investor means you:
- Involved in your financial situation.
- Prioritize your financial goals.
- Don’t be ashamed of your financial to-do list.
- Enthusiastic about creating a strategy and managing your goals.
Focus is essential for financial well-being because it promotes progress. Without clear goals, it is difficult to come up with a financial strategy to work towards those goals. And without a strategy, success is hard to measure.
Vanguard investors 14% more likely To say they are concentrating on the long term. **
A balanced investor has a fixed approach
Financial well-being involves diversifying investments, spending or saving, or maintaining a healthy balance when taking risks.
If your normal tendencies are not balanced then you may find it difficult to achieve balance. Maybe you prefer to spend more than savings, you are not comfortable with the recommended amount of risk for your age and asset status, or you are not sure which allocations or strategies form a healthy balance.
If you are an investor who practices balance, you can:
- Save enough for leisure and other important goals.
- There is a diversified portfolio that provides growth potential and reduces market volatility.
- Take appropriate investment risk so as not to be deprived of financial gain.
Without financial balance, you may face many negative consequences and achieve the milestones you envision.
Vanguard investors 65% more likely Be a self-educated investor. **
A calm investor is patient
If you are a quiet investor, you are more likely to think your financial plan is on track and see the value of waiting for a thoughtful investment strategy to pay off. Your financial situation does not make you anxious, does not encourage negative emotions or causes extreme anxiety and worry.
Being a quiet investor means you:
- Comfortable to stay in line with your financial plan.
- Adjust your financial decision making if needed.
- It is less likely to react excessively to market volatility.
- Avoid making hasty or hasty decisions for your financial loss.
You trust the process and focus on financial decisions. As a result, you are more confident and confident about where you are in your financial journey.
Vanguard investors 19% more likely To say that they do not respond to instability. **
An inspired investor has an eye on the future
Are you seeking financial freedom? What lifestyle do you want in your spare time? Are you planning to leave money for your heirs? Having a vision for your financial future will guide your decisions and strategies today.
If you are an inspired investor you can:
- Have a clear view of what financial success means to you.
- Set financial goals that can help you create your desired lifestyle.
- Understand how financial success fits into the context of your other life aspirations and values.
- Be honest about the life you want to create for yourself and your beneficiaries.
Whatever your personal motivation for finding financial well-being, it is easy to determine your path to success when you have a destination in mind.
Vanguard investors 10% more likely To say their investment philosophy is not spontaneous but planned. **
Put them all together
Pillars of financial well-being are most effective when they work in concert.
With this overall mentality, going to money is the key to achieving financial well-being. Consider what the strengths and opportunities of your well-being are and focus on maintaining those strengths and working on the opportunities.
And remember, wellness does not mean that you will have no worries or moments of adversity; This means that those moments are more manageable and less terrifying, and you can effectively move forward through such experiences and return to a state of confidence and calm.
Ready to work towards your goal?
Your financial well-being is unique to you – so should how you achieve it. We are here to help you build and strengthen your financial well-being to support your entire financial life.
Explore our resources to help you become a better investor.
* Amelia Nagowski and Emily Nagowski. Burnout: The secret to unlocking the stress cycle. New York: Random House Publishing Group, 2019.
** The Quality of life: 2021 Redux Market research firm Celton Global 2 conducted the study from January 2021 to February 2, 2021. All differences between Vanguard clients and clients of other investment firms are statistically significant at the 95% confidence level. The experience of these vanguard clients may not be representative of the experience of other vanguard clients and is not a guarantee of future investment performance or success. Quality of life: 2021 Redux. Kelton, 2021.
All investments are at risk, including the potential loss of money you invest. Diversity does not guarantee gain or protect from loss.
This information is intended to be educational and not consistent with the investment needs of any particular investor.
Annie Wilson He is a senior behavioral scientist at Vanguard. She got her PhD. Her BA in Marketing from Harvard Business School and English and Psychology from Georgetown University. Annie is an expert in consumer psychology, judgment and decision making, and experimental research theory.
“Financial Wellness: How You Can Achieve It”,