On Tuesday, General Electric told investors it will slash its quarterly dividend all the way to $0.01 per share. That's a 92% reduction relative to its 2018 dividend, and 96% less than what GE was paying just a year ago.
I had a client a few years ago that had most of his portfolio in GE stock. He didn’t feel the need to diversify his portfolio because of how “reliable” GE is. He bought the stocks decades ago, so at the time they were worth far more than he’d ever put into it.
I kept on encouraging him to diversify his portfolio, but he wasn’t worried. GE’s stock is now plummeting and this person’s income is dried up. He wasn’t planning for the unexpected.
Too many people build a plan that is going to work unless the “unthinkable” happens, but that’s not good enough.
There are other stocks that seem just as promising. Think about Publix. They seem extremely reliable, right? Wrong. Amazon bought out whole foods and all grocery stocks plummeted.
You need to diversify your portfolio and have a plan that works no matter what you throw at it. A plan that’s built for the long-term and for life happening. Build a plan that can pivot and flex. Then you feel peace.
The one guarantee we have is that the unexpected is coming!
How do you build a plan that’s built for the unexpected? The core of success is having a plan that’s built for flexibility. Think about how you’ve structured your financial world. What has been the guiding factor or the motivating factor?
You need to make decisions through the lens of flexibility. This is what I call a dynamic plan.
Begin asking yourself, “Is the decision i’m about to make increasing my ability to handle what comes in the future? Is this decision increasing the flexibility of my plan to pivot and switch when life happens?”
How are you building your plan for flexibility?
These three steps are essential to finding financial peace and building flexibility in your plan.
Build an emergency fund (3 months worth of expenses)
Fully fund a ROTH IRA
Pay off debt or invest
Let GE falling apart in front of you right now or the 2008 financial crisis you’ve witnesses help guide the way you think about finances. You want to be wise + prepared to live with peace.
Does your plan have an Achilles heel or a fatal flaw that exposes it to extreme risk? Even if it “feels safe” there are no certainties in planning. Friends, you have to have flexibility.