ETF Trends
ETF Trends

By Michael Kay via

I sensed an admonishment looming. “While I know I should leave my electric toothbrush in one place, I routinely move it around my mouth,” I admitted to the dental hygienist. She looked at me sorrowfully—the admonishment arrived as expected. She then told me I am doing my gums and teeth no amount of good by this tactic and that I need to be more mindful to get the greatest benefit. I nodded, clutching my dental goodie bag upon leaving.

On my way out, it occurred to me that, similar to brushing your teeth, meaningful financial planning is about knowing when to be active and when to be passive. Being active is not always the correct answer, and being passive can certainly do more damage than good in specific situations. When you hear the words “active” and “passive”, you likely think of an investment philosophy. But real financial planning goes far beyond your investments and your methodology; it encompasses the breadth of everything related to all financial-related decisions and actions.

Financial planning includes:

  • Cash Flow Management (Budgeting)
  • Risk Management (more than market risk)

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