Peace of Mind Quiz

Learn More About Your Financial Peace Of Mind – TAKE THIS QUIZ!

If you can answer ‘Yes’ to ALL of The 20 Must-Answer Questions, you will be on your way to a high level of peace of mind with your financial investments. The first step towards financial freedom is to be brutally honest with yourself. It starts right here. (Note: You have to be able to answer the question 100% in order to take a “yes” on this quiz. If you are only 99% or less sure of the answer, you must take a “no”) Are you ready?

1. Have you discovered your True Purpose for Money, that which is more important than money itself? (Can you explain this in a single sentence? It’s not enough to know that there is something more than money but to be able to explain it)

2. Are you invested in the Market? (For most people this is a “Yes” if they own equities)

3. Do you know how markets work? (You must know where market returns come from, where do the premiums come from and what are the expected long term rates of return for the asset mix that you own)

4. Have you defined your Investment Philosophy? (Most people have never heard of an investment philosophy. If you have one and can state is clearly, then go ahead and take a “yes”)

5. Have you identified your personal risk tolerance? (You have to be able to put an actual academic & scientific number to your risk identification)

6. Do you know how to measure diversification in your portfolio? (It’s not enough to say that you have a lot of “stuff” but you must know the academic & scientific number to measure diversification and correlations of different assets in your portfolio)

7. Do you consistently and predictably achieve market returns? (If you don’t know what your actual rates of return are for the past 10, 20 or 30 years based on your current asset mix, then you need to take a “no”)

8. Have you measured the total amount of commissions and costs in your portfolio? (You must know the hidden costs at the mutual fund level, the brokerage firm level, the insurance level and can identify, in dollar amount, what it is costing you every year)

9. Do you know where you fall on the Markowitz Efficient Frontier? (Most people have never heard of the Markowitz Efficient Frontier. If you know the intersection of your expected rate of return with your standard deviation and can identify where that is on the Frontier Graph given your current mix of assets, then you may take a “yes”)

10. When it comes to building your investment portfolio, do you know exactly what you are doing and why? (Do you make choices based on past history, media or friend advice, reading the paper, current interest rates at your bank, what your broker is selling at the time or do you know exactly what you are doing)

11. Are you working with a financial coach versus a financial planner? (If you answered all the previous questions with a “yes” you are working with a financial coach. If you answered at least one question as a “no” then you are working with a financial planner)

12. Do you have a customized lifelong game plan to guide all of your investing and spending decisions? (You must have it written down in one place. Note: This is not a financial plan)

13. Do you have an Investment Policy Statement? (A statement that identifies clearly the amount of risk, the expected rate of return on your mix of assets and what you will be doing in up and down markets)

14. Have you devised a clear-cut method for measuring the success or failure of your portfolio? (In other words, once you have built your portfolio, how do you know if it is operating within accepted variances and tolerances)

15. Do you fully understand the implications and applications of diversification in your portfolio? (You must know the variances of your portfolio, how volatile your mix of assets can be over time and understand the relationships between each asset within your portfolio)

16. Do you have a system to measure portfolio volatility? (You need to know how much your portfolio and jump up and down over time and this measurement needs to be a scientific number)

17. Are you aware of the incentives brokerage firms and the financial community have when selling commission-based products? (These are normally hidden to the consumer and are very hard to find)

18. Do you know the three warning signs that you are gambling and speculating with your money versus prudently investing it? (If you attended one of my educational seminars you will know the answers to this question, if you have not attended then you will undoubtedly take a “no”)

19. Can you identify the cultural messages and personal mind-sets about money that destroy your peace of mind? (These are the things that you are being bombarded with daily by the television, media, print magazines, etc. and how they effect your personal mind-set towards investing. You must be able to clearly identify the messages)

20. Are you ready to shift your personal experience of money and investing from a scarcity mode to an abundance mode? (This is really the only question that you should get a “yes” on in order to make progress, get better and achieve true investing peace of mind)

*If you honestly answered 10 questions or less, you are working with a financial “advisor” and you will need to hire a Financial Coach.