If you ask a bunch of people how they are doing financially, you’ll get a wide range of answers. Some will tell you they are doing great…that they made a 12% return last year. Others will tell you they are doing lousy…that they lost 12% last year.

But do returns have anything to do with how you’re doing financially?

Returns are certainly important, but great returns alone dont mean that you are doing fine financially. That 12% return you made doesn’t matter much if you give a big chunk of it to Uncle Sam, spend all of it on long-term care costs, or if your return was eaten up by probate and estate costs. So while your returns are important, they amount to nothing if you dont take care of your affairs. If you leave everything in chaos when you die, your surviving spouse or family will not only spend all of those returns you’ve bragged about, but more. With all the stress involved of cleaning up investments and accounts, not to mention taxes and other problems, he or she will probably be on the verge of a breakdown.