Mailchimp says the best time to build a marketing mailing list is when you first get your business idea. But if you didn’t do it then, the second best time is now! When you think about it, the same goes for many other things. The best time to join a gym is when you first get the idea. The second best time is now. The best time to start studying for a test is when you start the course. The second best time is now. You get the idea.
Last week we talked about retirement planning. The best time to start savings is when you get your first paycheck. But what if that’s not you? What if you rarely thought about 401k decisions and your retirement plan? Or maybe your retirement plan is OK, but you have been putting off something else important, like planning for your children’s education, reviewing your insurance needs and coverage, your student loans, you name it.
Don’t Get Discouraged
If you feel this way, know that you are in good company. Most of us feel the same for one reason or another. With limited time on our hands, we simply tend to prioritize things that give us instant gratification or solve an immediate problem over things that may be more important but don’t affect us right now, like retirement or estate planning. One reason we may put something off is that we perceive it as overwhelming. Financial planning can certainly feel that way. If you are a family with young children, you probably have to think about your career plans, insurance needs, mortgage payments, your children’s education, your retirement plan, and basic estate planning on top of everything else that affects you right now. Where do you even start?
Another reason we put off planning is that we may hear advice that we believe is unattainable. For example, you may have heard that to retire comfortably you need to replace 80% of pre-retirement income, or that you need to accumulate 25 times the retirement income you want in retirement. Say you make $100,000 now. These rules of thumb mean you need to generate income of $80,000 a year throughout retirement, which you can do if you accumulate $2,000,000 by the time you retire. Many of us don’t even want to go through these calculations for fear of what we may find.
Start today!
Whatever the reason why you have been putting off important plans, don’t get discouraged and take some action today. First, you get a hug from us at DESMO. Like us on facebook and we’ll like you back. You got this. Then, forget about rules of thumbs or the idea that planning is painful and overwhelming. Here are two simple ways you can go about this today:
- You focus on making a few, high impact actions, starting today;
- You hire a certified financial planner or CFP®.
Let’s discuss (2) first, as it’s the simpler option. Many good planners make it really easy to schedule a consultation from their website. They usually have a button that works like this. I suggest you look for a CFP® professional because they adhere to a higher set of ethical standards for clients, and are trained in comprehensive financial planning, the only way to have a truly personal plan. Look for someone that you can connect with. Hiring an advisor is like hiring a personal trainer to help you reach your fitness goals. Besides being the expert, the advisor acts as the ‘workout buddy’ you need to accomplish your life goals.
There may be two types of deterrents to working with an advisor. One is cost and two is having enough money to invest. You may think: how can I add this cost if I am already behind with my savings? Keep in mind you are not simply paying for a plan or a service. You are paying for a better outcome. If the outcome you can achieve after paying the cost is better than what you can achieve on your own, the cost is worth it. Some advisors may require a minimum of investable assets, like $300,000 or $500,000 to invest with them. That’s typically because they charge you for managing your money, and include financial planning as a free service. Usually you get what you pay for, so seek fee-only financial planners that charge for the financial planning service and don’t have a minimum requirement. At DESMO, we believe everyone deserves a personal plan and so we have no minimums.
Now let’s discuss (1). If you are a DIYer and aren’t ready for the help of a planner, focus on making high impact decisions today. First, get financially organized. As we discussed here, financial organization equals awareness. You can use this awareness to set realistic goals and find ways to save more towards them. If your main goal is retirement planning and feel you are behind, save as much as reasonably can, and review your cash flows regularly for ways to increase your savings. Take a look at our guides, and read up more on the subject of planning. A good book to start with is The One Page Financial Plan, by Carl Richards.
Whether you hire a planner or decide to improve your financial wellness by yourself, the best time to act is Today, so don’t wait!
Until next time!
Massi De Santis is an Austin, TX fee-only financial planner. DESMO Wealth Advisors, LLC provides objective financial planning and investment management to help clients organize, grow and protect their resources throughout their lives. As a fee-only, fiduciary, and independent financial advisor, Massi De Santis is never paid a commission of any kind, and has a legal obligation to provide unbiased and trustworthy financial advice.
