Spring is almost over and another Father’s Day upon us.
Here at The Retirement Guys, it’s important that we don’t forget lessons learned from the past — lessons on character, hard work, perseverance, patience, etc. Although it is ultimately up to us what kind of people we choose to be, our parents (especially our fathers) and grandparents probably had something to do with how we turned out.
We asked members of The Retirement Guys team what lessons they learned from their fathers. Here are a few examples: “Hard work beats talent,” and “Do it right or do it again.” It occurred to us that there was a resounding theme in those “words of advice” from the dear old dads, especially when it comes to finances.
In honor of Father’s Day, we’d like to recommend the following father-like advice to help you develop the best financial plan possible:
1. A house is built by wisdom and becomes strong through good sense.
One way to follow the advice in this Proverbs verse (24:3) is to make sure you have an emergency fund that makes sense. Make sure there is enough money in this account to provide emergency income for up to six months. Gaining financial independence starts with building a liquid account, such as a savings or money market account, to cover emergencies that will undoubtedly arise. Think furnace, roof, car, natural disaster, etc.
2. There can be benefits from moving money from one pocket to another.
Don’t you just love it when you put on your jean, check the pockets and find $20? Who doesn’t? One of the best parts of our job is to help people “find” money. Finding money for clients is a two-part process that involves looking at the money going out and looking at the money coming in. Sometimes found money might just mean identifying ways to curb unnecessary spending habits. Other times, after a portfolio analysis we can find opportunities to add benefits and value to investments by simply switching assets from one account to another.
3. The best way to eat a whale is one bite at a time.
It’s rare that we run into a retired couple that has a large amount of debt but is living comfortably. One way to help eliminate debt is to make a list of the totals of each debt, starting with the lowest. Then start using your extra monthly income to chip away at the smallest balance and eliminate your list one debt at a time. This simple plan makes becoming debt free more feasible and you will feel more accomplished after each debt is crossed off your list.
4. You can be young without money, but you can’t be old without it.
Time flies and what seems like “a long way off” will be here before you know it. Remember that financial independence means freedom from control or influence of others. At any point the company retirement plan could change, be it the pension, health expenses, etc. The same should be expected with government benefits such as Social Security. The single best way to address this would be to save and invest on your own. Put away 20 percent of your earnings in a retirement savings account.
It may take some character, hard work, perseverance and patience, but won’t being able to reach a state of financial independence be worth it? It’s a great feeling knowing you are in control your own destiny through a solid financial retirement plan.
In the meantime, The Retirement Guys wish you all a very happy Father’s Day.