Most deliberate journeys in life start with a decision to go, change, or work toward something more desirable than our current situation. Planning for financial independence is no different. In reality, we all have a financial plan. Some are by design, and some are by default. Designed plans pursue pre-determined outcomes as the culmination of a disciplined process while default plans typically suffer unintended consequences. The question to ask yourself is “What kind of plan do I have?”

There are different approaches to identifying, assessing and managing risk within an investment portfolio. Every individual must decide what market risks are possible with a specific investment and if those risks involve the possible permanent loss of capital.
Alternatively, they may deem risk to be defined as the level of fluctuation in value over time believing there is a negligible potential for permanent loss. Another risk to consider is that of being so conservative that the realized rate-of-return does not keep up with inflation and falls short in meeting the returns needed to fund desired goals.