Good planning can spare you the agony of crossing your "finish line" only to fall back behind it by not properly adjusting your risk level downward.

4. Allocate appropriately.As we wrote in Your Most Important Investing Decision, your asset allocation will determine the performance of your portfolio more than any other single factor.

5. Make good investment decisions.Easier said than done, right? Nobody is ever going to make all the "right" investment decisions. But there are definite steps you can take that will improve your odds of success.

At SMI, we're big believers in using mechanical strategies to eliminate emotional decision-making. Most people's emotions tell them exactly the wrong thing when it comes to investing (e.g., that sick feeling you get when the market drops is not a good reason to sell!). Our Fund Upgrading strategy has demonstrated an ability to generate attractive long-term profits and is the primary investing approach we suggest to readers.

6. Monitor and adjust.This can be a tricky step, but it doesn't need to be. First, you need to periodically re-visit the first five steps on this list. Your budget won't likely be the same at age 30 as at 55, and neither will your asset allocation. Life happens — an illness, job change, unexpected blessings that cry and need their diapers changed — these and a thousand other factors may cause you to adjust your plan as you go. That's okay. Just don't abandon the old plan without putting a new plan in place.

On the investment side, things are a little more rigid — you don't make changes to your plan just because the market is down 25% and you're feeling queasy. But if you come across new information or a new strategy that makes you honestly (and unemotionally) feel that a change is warranted in your plan, there's flexibility to build it into your plan. Circling back to point #1 though, you need to make sure any changes are inside-out, not outside-in.

These six steps aren't the only way to approach creating a long-term investing plan, nor are they comprehensive in terms of taxes, estate planning, insurance, and so forth. But they do provide an effective road map for most people to gauge their fundamental investing needs and get started.

Inertia, not a lack of perfection, is the primary obstacle for most people as they travel down the road to financial freedom. There's plenty of time to fine-tune things further once you're underway.

Published since 1990, Sound Mind Investing is America's best-selling financial newsletter written from a biblical perspective. Visit the Sound Mind Investing website .

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