Financial planning has really turned into one of the core pillars of my business over the past year. Any Advisor could give you a portfolio to help you make money but the real value is in helping answer the big questions for clients.

 

                What I learned along the way has really helped shape me and also helped grow my business. My clients are less interested in whether they have Amazon or Alphabet (nee Google), rather they want to know their savings are well cared for and working towards a myriad of different goals and targets.

 

                I also learned that one of the keys to success is keeping your financial affairs simple. Needlessly complicated finances just create more volatility and ultimately make it harder for you to meet the end goal. Here are some of my simple rules for financial success.

 

1. Pay Yourself First - the simplest thing to start saving is to “start” saving. Set up automatic withdrawal plans to match your pay schedule. After 2 months you will never notice the money. After 2 years you WILL notice how much you have set aside in savings!
    
2. Debt Good/Debt Bad - the basic of using debt to purchase an asset that increases in value (i.e. a home or education) vs using debt to buy a depreciating asset (those Beanie Babies are not going to be worth more in 10 years, trust me!). Now what they forgot to tell you is that Debt Good can also be Debt Bad if you have too much of it.
    
3. Earn More, Spend Less - lifestyle creep is a huge problem for many people. You were living on a family income of $90,000 last year perfectly fine but suddenly you got raises and family income is $100,000. Most people increase their lifestyle to spend that new income. The families that save most of that new income are the ones that do great in the long run. It’s a vicious cycle that really starts to burn once the pay increases stop (Solve this using #1 above)
    
4. Live for now and plan for tomorrow - I also call this my Sunny Days/Rainy Days rule. I enjoy travelling. Many people do and with a young family, I want to take them to see new places because I think it is important for my kids to experience different people and cultures. That means I sacrifice something now (sorry golf, you and I were only casual to begin with) for an important part of my live now money. But I also save to plan for tomorrow. Live for now is great BUT only if it is tied to plan for tomorrow.
    
5. Beware the financial charlatan - I had a new client tell me their insurance person would call them every third year and tell them about a new life insurance plan that was “perfect” for them. Guess what? That’s a Financial Charlatan! Here is how to tell if you have one in your life. If someone suggests to you a product that will do X for you but has not taken the time to build a plan to know if X actually helps you, you might be talking to one.

 

The last point to consider is to find the proper people around you to help manage your affairs. A good Accountant is worth the price in the long run. A good Wealth Manager may not get you “market beating” returns but they will keep you on path to your goals and protect you from making emotional errors with your finances and that is their true value. A good family is the best decision of all. You will spend most of your time and money on them so make it right in these areas and everything else will fall into place.

 

 

If you want to learn more about using these simple rules to meet your financial goals, contact me here.

 

 

 

 

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