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Creating a Roadmap For Financial Success

Everyone has a different reason for meeting with a financial advisor. Some want a growth plan. Some just want a retirement plan. Others may just want to double-check to make sure that they’re doing what they’re supposed to be doing. We’ve seen a lot of mistakes throughout each process.

There are people who do what we affectionately call “the ostrich.” They stick their head in the ground, throw money at their retirement account, and hope it will hold out. Passive management is not a valid way to handle your finances. Our recommendation is to pack money into a 401(k), put money into that IRA or a Roth, and let it grow. We’ve been given these vehicles, and they say to just save, save, save, but there does come a point where you’ve got to make sure you’ve done the work and see how it’s going to pay off in retirement.

You’ve probably been told that a 401(k) is a phenomenal savings tool, but not necessarily a growth tool. If your employer matches your contribution, that’s great, but you need to build more on what you’re putting in. What they don’t teach you in high school or college, unless you have a specific degree, is how to get that money back to you. We recommend that you take that 401(k) and IRA and figure out how to turn it into a “money machine.”

The focus and goal of your portfolio will change as you move through each stage of life. As you age, your perspective will likely change to protecting the assets you have built rather than adding risk for  potential reward. It’s important to understand which phase you are in to help set your accounts on the right track.

Fees on your retirement account are another important consideration. Many people don’t understand all the different fees inside a 401(k) plan, and if you simply leave your money in there, you’re going to continue to pay on it even if you don’t work at the same place anymore. There’s a leak in your bucket, as some would say. The mindset change we need to undergo is to forget about the magic number you’re trying to reach and instead consider what that big number does for you per month. This a great place for a financial professional to step in.

Mark Twain said that “comparison is the death of joy.” It doesn’t matter if the Joneses have $2 million if they’re spending $50,000 a month. Somebody with $500,000 who is spending $5,000 might just be in a better position. It doesn’t matter about the size of your portfolio. We’ve met with people who have upwards of $4 million who we are still not able to help and people with around $400,000 who are in a much better spot.

There are a lot of factors that determine a successful retirement. What people need to understand is that you have to be happy with what you’ve developed at the end of the day. It’s your retirement, and you have to live with it, nobody else. And when you come into the office of a financial professional, you need to think of your plan as a map. Discover where you are on the map and where you want to go. Every person is different, and it’s your journey to take.

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