When investment markets are as unpredictable and volatile as they have been lately; when security values in personal portfolios are dropping like stones, investors cannot ignore the results. Having a personal financial plan in place that defines current and future goals, time frames, investment allocations, the risk one is comfortable taking on, the amount of cash needed for contingencies, retirement and estate wishes can make the difference between using cool logical investment judgment, or succumbing to personal emotional and mental turbulence reflective of market volatility.

Part 5 - of the First Official Financial Planning Week in Bermuda, October 6-12, launched by Argus Financial Ltd. At the end of their financial journey, our composite family, the Couples, have also had an arduous week, working their way through the five steps in their financial plan. See the Couples Family Profile, and Parts 2, 3, 4 in The Royal Gazette archives for this week.

They started their family finance review when Mr. Couple's father passed away; this sad life stage event precipitated a personal and business cash flow crisis that threatened to engulf them. After an initial success in reorganising their income and establishing control their expenses strategies, they decided to engage the services of a fee-only professionally qualified financial planner.

They were fully aware that they could intelligently put together a financial plan on their own. After all there were lots of self-help websites available; however, they felt that they needed the objectivity, experience and knowledge that their qualified planner could provide. For instance, neither of them was comfortable with their pension portfolio choices, nor were they overly enthusiastic about choosing a couple of mutual funds because there seemed to be no correlation with the rest of their finances.

Frankly, they were not inclined to devote the time needed to keep pace with this ever-changing investment world. After coping every day with small children, other family dependents and a family business, sleep survival was their strongest motivation. Mr. Couple put it this way. "I am an expert in my business. We want an expert in the investment business that we trust to handle our finances."

As they discuss how to handle their future investment portfolio allocations (they don't have the money now to invest because it is preordained for their home purchase) with their planner, they reflect upon the success they have had already by just watching their spending while increasing their monthly income. In retrospect, it seems so easy, but they know that they put off doing anything for years because it appeared to be 'heavy' homework. What have the Couples accomplished? They have been rigorous in their family finance review finding multiple areas of saving that have not really impacted their lifestyle. Just by tightening up on overspending on food, taking bag lunches from home, purchasing food value items rather than junkie 'grazer' snack items, using a clothes lines, stricter dollar limits on food and other shopping items, cooking at home involving the kids, hand washing some items rather than dry cleaning, they have seen an increase in their savings contingency account.

In truth, they realised that they had succumbed to the 'casual consumption' lifestyle, the pattern of buying without asking the question: is this an appreciating or depreciating asset? Over the years, we all have a tendency to fall into these habits, never stopping to realise that they could be easily reined in. Their goal now is a home, an appreciating asset, and they feel very, very motivated.

Business receivables are under control with much shorter dating collections. Cash flow is better, allowing them to plan for a more sustainable business growth and diversification in the business. They may be able to hire additional staff to handle the increased volume of customer orders.

Life Insurance has been put in place on both of them; not as much as they'd like, but enough to mitigate some financial loss of one income earner. Mrs. Couple is relieved as the burden of two widowed mothers-in-law is wearing her down. She knows she must continue to be the strong person in her family.

She has enrolled in college courses, a life long dream and plans on eventually sitting for the CMA designation. She has become a role model for her daughter.

With the help of their attorney, their wills have been executed; a medical care directive and a business succession plan have been put in place.

Now that they have finalised their savings and contingency planning, the last items to review are their retirement pensions and investment strategies.

Capital markets of late have been very volatile, with broad market valuation drops. They are concerned about this as are friends, some of whom feel very concerned. Their planner works with them to be sure that they truly understand their tolerance for risk of loss. Focusing on the longer term view, Mr. Couple chooses aggressive, and Mrs., being more cautious, a balanced mix. They will let this grow with regular contributions for the next 30 years.

Feeling more assured now that they have put their plan into place, they know they have far better control of their personal finances. They have planned for a cash contingency cushion, investing in their business medium term, and long term capital appreciation. They feel so much more comfortable with the plan for financial success and refuse to compare themselves to the small investor fear that the well-paid financial media keep portraying.

Time in on their side. It is also not time to make drastic changes in their pensions or other investment strategies as they know their pensions are professionally managed and allocated across a global spectrum of investment assets. They are young and will go through five or more business cycles before retiring.

And they remain highly motivated. They are resolved that they will save the money, no elaborate vacations for a few years. They do plan to buy two wicker chairs - to mimic sitting on the beach with dark n' stormys in some exotic place. Imagination, inspiration and motivation can take you to where you want to go.

Martha Harris Myron CPA -NH1929, CFP® -67184 (US licences) TEP#203510 - Society of Trust and Estate Practitioners,UK. She is a Senior Wealth Manager at Argus Financial Limited with international experience, specialising in investment advisory services and comprehensive financial solutions for individual private clients and their families, business owners, endowments and trusts. DirectLine: 294-5709. Confidential e-mail can be directed to mmyron@argusfinancial.bm. The article expresses the opinion of the author alone. Under no circumstances is the content of this article to be taken as specific individual investment advice, nor as a recommendation to buy/ sell any investment product.