One of the core principles of good financial planning concerns trade-offs. That is, taking less of something now in order to receive more of something later. Many of us aren't very good at trade-offs because it forces us to establish priorities.

One of my professors used to talk about visualizing priorities as a glass of orange juice. The glass holds 8 ounces of juice (the exact amount for our purpose here) in a single orange. From an investment perspective, if we seek 6 ounces of long term growth, then we only have 2 ounces remaining for liquidity; safety; current income; tax favorability. If we want more current income, we have to be willing to take less in the way of growth. If we want more safety, we give up a few ounces of liquidity. The key is to balance these competing objectives.

Over the years we have used these examples to help explain, in a simple format, that we can't maximize each investment component since the total is limited. Investors often try to ignore this and think they can have 12 ounces or even more; but the push/pull nature of investing wins in the long run. This is why risk and return are related. You accept more risk and you have the opportunity for more long-term return. It may well not look that way every day, but over time, this investing truth works.

Taking control of your financial life means developing a clear understanding of financial truths and how your choices impact you. We need to carefully distinguish between the "dream" and the "reality". Our job is to help remove the nuance and provide independent advice that is in your best interest.