Stage 1 And Stage 4 Rapids

When it comes to your finances, are you a Stage 1 or a Stage 4 White Water rafter?

This economic meltdown has many people second-guessing the financial decisions made in the last 8 years.Where do you stand, and what can you do about it?

Last summer we shot the Snake River rapids in the Grand Tetons.Like many rapids, the river offered its “flat” moments (stage 1), and churning moments (stage 4).One time we prepared ourselves for a level 4, and were hit by something unexpected, hail.  In the middle of summer we turned a corner and were pelted by hail stones in the face during a storm.

I think many of us can relate to this in the current economic times.But, the extent of damage depended on whether you operate your business (and personal finances) in a stage 1 or stage 4 rapids

I found there are two main types of business and investment personalities:One type are those who lived during the depression, or learned by it.They are very conservative in what they do, and try not to be too speculative in whatever they do.The other type is the sprinter.Many of these sprinters profited handsomely in the past 8 years riding the leverage train of real estate.In their business, also, they seem to leverage heavily.

When I work with clients strategies, I keep these two polar positions in mind.If a client is younger, then they can obviously take more risks.However, when a client approaches middle age, I caution them that the downside is more severe if they do not meet their objectives.So, both in personal and business opportunities I recommend the following:

1. Always have a well thought-out strategy. What do you want to accomplish?
2. Don’t fool yourself with the possible outcomes. Look at worst case scenarios.
3. Plan for both your intended outcome and your worst case scenarios.
4. You may want to reduce your risk, just in case the worst case scenario occurs.
5. Execute the plan and view it objectively. Too many business persons in this position extend their risk because they are looking for the “next big deal.” I find this rose-colored glasses approach a major cause of business failures.
6. If you are hurt by the resent economic melt-down, adjust your strategy towards a stage 1, but don’t circle the wagons. Keep a sharp lookout for business opportunities that may pay handsomely when the economy recovers.

We work with our clients in strategizing and executing their dreams.Let us work with yours.