How To Design A Financial Plan That Thrives In Any Economy

The U.S. dollar dominates global trade, but if you have been paying attention, you know that the dollar has lost some purchasing power in the last decade based on many not-so-random factors. The financial markets affect our lives, and whether you are an investor or just a regular person earning an income and paying bills, you must make plans for when things go sideways.

What is a Financial Plan?

A financial plan is a written detail of your current financial situation, objectives, goals, and, more importantly, how you want to achieve them. In modern monetary markets, your plan should include three key things: savings, spending, and investing to ensure longevity and safety despite market conditions.

In light of this, personal finance knowledge and knowing how to use TradingView and other modern tools for analyzing markets, tracking asset performance, and adjusting strategies are crucial for everyone. You need a combination of the right tools and some financial education to understand how markets work and how you can stay ahead to protect your finances.

Why You Need an Adaptable Plan

Let’s face it: the world is changing, and there’s always a chance that one government policy or another will be unfavourable. No, you don’t have to be an investment guru to plan your finances, but you do need to pay attention and sit down to craft a plan that works so that you can stay afloat.

Most people think financial planning is only about investing, but it begins with protecting your current net worth from being eroded by inflation. So, your plan should focus more on keeping expenses below your income, diversifying your assets, and making decisions based on data, not emotions. Every step, every action, and inaction should lead to your objectives.

How To Build an Adaptable Financial Plan

Not every financial plan is the same; while some work when the economy is good, others would incur losses in other conditions. Some plans, however, are resilient and can adapt to any financial situation. You are responsible for ensuring your financial plan is robust enough to maximize returns and minimize drawdowns.

No plan is foolproof, of course, but through careful planning and strict execution, you can stay consistent and protect your money. Here are four points to consider.

Set Your Goals and Objectives

No plan works without targets. In personal finance, you cannot detail your plans without reasonable, fixed, and verifiable goals. Experts argue the merits of setting multiple or single goals for a plan, but you should do what fits your circumstances. If, for example, you don’t have any investment and you are in debt, your initial goal should be getting out of debt and eventually saving some of your income.

If you have investments, your goals should be to preserve your finances from inflation and increase returns gradually. Write each goal in detail and set a timeline for achieving it. For example, you can set a goal to become debt-free in 20 months by paying 5% of your debt monthly. You can also invest at least $50,000 annually by investing $500 monthly.

Leverage Digital Tools for Data-Driven Decisions

TradingView is one of the most complete tools for planning your finances today. Its various features help you plan and execute your strategies.

With TradingView, you can:

• Monitor market trends: TradingView has several indicators, trendlines, and charts that help identify trends. Expert and peer-led analyses of economic events, company financial statements, and fundamental data like inflation and employment rates also help identify market trends.

When you master the art of identifying trends, you can accurately predict the economic situation and adjust your financial plans accordingly. 

• Analyze asset performance: With tools like stock screeners, you can use TradingView to analyze how assets in your portfolio perform. Whether it’s since they launched or in the last few hours, you can see past and current performance and adjust your portfolio. This is useful for minimizing the effects of negative volatility.

• Adjust strategies in real time: Access to real-time market data has been a game-changer for investors and traders. However, anyone can use it to adjust their trading plans, especially when markets are volatile. For example, a small business owner can track changes in the USD market price to predict whether or not the U.S. Federal Reserve may tighten interest rates. Similarly, individuals paying off mortgages or other loans can also track the USD price to predict interest rate changes, which may affect their loans.

Diversify Your Portfolio

You must incorporate portfolio diversification if you plan to preserve your finances. The advantage of diversifying is that it spreads risk and improves returns. On the other hand, overdiversifying your assets can make your portfolio worthless. Your financial plan should include careful research, 2–4 assets/instruments/industries you invest in. Popular principles like the 80/20, 70/30/10, and 60/20/20 are great for diversifying your assets.

Get Comfortable With Waiting

Building your finances is a waiting game. You can’t save, spend, or invest to reach your goal all in one day. What you can do is to find the right opportunities, and that means waiting without doing anything with your portfolio. However, you should balance this with being decisive and fast when it matters. Wait for the right opportunities but execute fearlessly in line with your plan.

A good example is if your goal is to hedge against inflation while maximizing profits. You can keep your dollar assets without selling off and wait for their value to increase. Then, you can sell off and purchase gold, Bitcoin, or other commodities that traditionally move against the dollar.

Don’t Get Caught by Inflation, Plan Ahead

Market changes are constant, and you can only beat the market by making plans and strictly following them. Start where you are and work towards financial freedom by planning every move. If you are in debt, draw a plan to become debt-free, and if you now earn enough, start researching the best-fit ways to avoid inflation and make your money work for you in various markets.