Looking at values can be exciting or depressing. Simply throwing more in the proverbial kitty is not the answer. You need to focus on the four areas that will impact your disciplined effort results. This article is the first installment of the four.

Never forget that it is what it is. You decide to say no to something you could have done today with every dollar you choose to save. Whether that be Disney, a more excellent car, a bigger house, you have said no to something you could have said yes to have a more enjoyable life today.

The discipline to say no really resides around choices. Do you do this or do that is based on resources: health, energy, opportunity, and money. Though we cannot control the first three, I have made it my life’s work to manage the last one.

At the Financial Enhancement Group, we call it the Fiduciary Focus. There are four parts. There are four things you should consider in every financial decision you make. They may seem simple, but they are my life’s work.

There is the risk of volatility in every decision. Never make an investment you cannot live or sleep with, as you will undoubtedly pull the plug at precisely the wrong time. Risk is the rarity that you may not even get your investment back. Volatility is that you may not get the investment back when you need it. Markets do go up and down. They always have, and they always will. Understanding the difference between the risk – total loss – and volatility is imperative if you choose to be you’re your fiduciary.

The second lens that you must examine is that of fees and expenses. Here a careful eye is crucial as these are two different issues. Fees are what is declared in the prospectus or what I like to call the governing eye. Expenses are considered as “the cost of doing business.” That is hogwash and a way for Wall Street to rip you off.

You can choose to hang the oil in your car. I can’t or am not willing, pick one, but the cost is the oil and your time. You go to a Jiffy Lube, and you pay for their oil at a reasonable markup and their time. There shouldn’t be any other hidden expenses.

That is not how the investment world works. There is a cost of doing business at every level of the trade. That doesn’t mean it is a worthless expense, but it does need to be understood. For instance, why would I want to pay for a professional money manager – a fee to hire other professional money managers – i.e., mutual fund managers – who then employ exchange-traded funds (ETF’s) that charge even more fees inside their investment models?

You cannot read this and not recognize a severe flaw in human investment methodology. I have a job to do. That is to make you think before you invest. Keep reading. There will be more next week.

Joseph A. Clark is a Certified Financial Planner and Managing Partner of The Financial Enhancement Group, and an SEC Registered Investment Advisor. This article was co-authored by Joe Clark, CFP. Contact Joe at yourlifeafterwork.com or 800-928-4001. Securities offered through World Equity Group, Inc. Member FINRA/SIPC. Advisory services can be provided by the Financial Enhancement Group (FEG) or World Equity Group. FEG and World Equity Group are separately owned and operated.

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