The Financial Cafe’

Building a Solid Investment Foundation

Many investors believe they just need a few select mutual funds or index funds to balance out their investment portfolio. Although the right group of mutual/index funds might provide some diversification, it may not align with your personal financial needs. Investing is unique to every person because each of us has different goals we are seeking from our assets. A one size fits all approach will not satisfy everyone. Building a solid investment foundation requires individuals to look within themselves and their family needs before developing their portfolio goals. Austin Pryor calls this analysis “” thinking as opposed to “outside-in” considerations (Pryor, 2021). Additionally, analyzing your risk factors involving both the ability to bring you peace of mind and comfort as well as your individual “” decisions plays a big part in developing your investment portfolio.

“For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it — lest, after he has laid the foundation, and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish’?” (Luke 14:28–30 NKJV).

Your investments should start with the end in mind. If you start your investment plan using the approach, you will be better prepared to weather the retirement dilemma. Consequently, I have always been a vigorous proponent of investing using a mentality. The reason for using a cash flow mindset, as opposed to the familiar accumulation mindset, is because it allows the investor to always keep the end in mind. Remember, investing for retirement is not the climax of the story. is the second phase of our overall investment strategy. Many investors move into retirement in a , not knowing if their assets will carry them through their retirement years. Unfortunately, this is easily avoided by simply beginning with the end in mind instead of the approach where you are listening to the latest stock market gurus and making decisions based on the outside world thinking. Sometimes it is difficult to block out all the noise from the world, but it is critical not to let these distractions deter you from proper investment foundation planning.

“Do not overwork to be rich; Because of your own understanding, cease!
Will you set your eyes on that which is not? For certainly make themselves wings; They fly away like an eagle heaven.” (Proverbs 23: 4–5 NKJV).

Another factor for building a solid investment foundation is determining your risk tolerances, which change as you mature in your investing, along with the particular “glide path” or the number of years until you retire, into the investment planning scenario. Again, not everyone has a magic number to attain or a certain age consideration before retirement. Just because the government has determined that age 65 is a good retirement age for starting Medicare, it doesn’t necessarily need to correlate with your retirement plan. Some people take on other careers, called “” or want to work part-time during retirement. Likewise, some investors set goals to start a new business or get more involved in philanthropic endeavors once they retire. We should consider all these factors as you build your investment plan and work through updating it periodically. Last, we cannot forget the basics of constructing a solid such as debt elimination, emergency capital, healthcare needs, and life protection as we build and monitor our financial readiness.

Building a solid investment foundation should not be influenced by the headlines in the financial markets or what others purport to know about how you should invest. What is happening in the financial markets should be of no consequence to you as you construct your investment foundation. It is only when you are sitting on a firm investment foundation that the economy and financial markets make a difference, especially during the time leading up to your retirement journey. The five-year period before departure from active employment is a critical time to work on your retirement income planning with your financial advisor. Regrettably, the retirement income part of the planning process is often ignored because we are so focused on retirement accumulation that the reality of retirement itself becomes a shock to our system.

Your faithful servant


Pryor, A., & Biller, M. (2021). . Moody Publishers.

The Holy Bible: NKJV New King James Version. (2016). Nashville, Tennessee: Holman Bible.



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