The Trailhead

Bill Parrott |

I just returned from Colorado where I spent a week riding horses and hiking in the Rocky Mountain National Park. One of my hikes was to the summit of Estes Cone. It’s considered a strenuous hike with an elevation gain of 1,800 feet or 551 feet per mile.[1]

Most trails are well marked from the beginning including the trail for Estes Cone. The trailhead for our hike was the Longs Peak trailhead. Longs Peak is the ultimate hike in the park and someday I’ll hike it, maybe. Our group was initially stuck at a fork in the road before we referenced our trail map. After a brief detour, we were back on the trail.

The trailhead is often the best place to start when you go hiking.  It would be helpful if there were financial trailheads for individuals who want to save money, create a budget or pay off debt, but there isn’t, at least not one for everybody. Even though there isn’t a single map for financial success, others have left clues and markers to help you reach your financial goals. Here are a few suggestions.

Start. Hikers start at the trailhead because it’s usually the lowest point on the trail. Start by setting a few short-term goals like opening a savings account, paying off a credit card, or creating a budget. It’s okay to start small. A little nudge might be all you need to get moving.

Orient. When hikers reach the trailhead, they orient their compass to the summit and trail map. The map and compass will guide them to their goal. Likewise, your financial goals will help you orient your path. Well defined goals are needed for financial success.

Gear. Hikers love gear – shoes, packs, knives, poles, etc. These items are essential for a successful hike. Investors need quality gear as well. Financial software can make your life easier. Today you can find software for any scenario like financing college, paying off your mortgage, buying life insurance, or leasing a car.  These tools will help you get your financial house in order.

Guide. Our hike was led by one of the ranch hands where we were staying. He knew the trail and led us to a successful hike. We could have hiked without a guide, but it may have taken us longer to reach the top. To increase your chance of obtaining your goals consider hiring a Certified Financial Planner® who can help you guide your financial steps. A CFP® professional is trained to handle a multitude of investment and planning scenarios.  

Valleys. Some trails will take you through a valley before you reach the summit. When you enter a valley, it might not feel like you’re going to reach your goal, but if you stay on the trail and follow your map, you’ll reach the summit. Markets will take you deep in the valley at times in the form of corrections or pullbacks. During these down days stay true to your financial path and don’t panic. Market corrections are normal and short-term in nature.

Obstacles. Trails can be besieged with rocks, trees, shrubs or water. If you’re not paying attention to your steps, you can trip and tumble. A hiker in our group referred to this as the “tuck and roll.” Staying focused on your financial goals is paramount so don’t get distracted by taking your eyes off your goal.   

Rest. It’s okay to stop on the trail to catch your breath, drink some water, grab a snack and check your bearings. In fact, it’s recommended. It’s also recommended to review your accounts often to make sure they’re performing to your satisfaction. Reviewing your asset allocation, risk level, and performance will help you stay invested for the long haul.  Adjust your portfolio as needed so you can stay focused on your financial goals.

Peaks. The summit is the goal for hikers. The summit for Estes Cone is 11,006 feet. Your summit may be a financial goal you’ve reached. Your peak, or financial goal, will keep you moving forward. If you’ve reached your summit, celebrate.

Hiking is a great activity, particularly in a national park. The challenges of a mountain make for great adventure.

Investing is challenging, but with the right tools and resources you will have an opportunity to reach your financial summit. Climb on!

The mountains are calling, and I must go. ~ John Muir

July 2, 2019

Bill Parrott, CFP®, CKA® is the President and CEO of Parrott Wealth Management located in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose.

Note: Investments are not guaranteed and do involve risk. Your returns may differ than those posted in this blog. PWM is not a tax advisor, nor do we give tax advice. Please consult your tax advisor for items that are specific to your situation.