Please allow me to share a bit about a recent conversation I had with a friend of mine recently. It was impossible to miss the sorrow infused in a discussion I had with him recently. He shares the same birth year as me. We were both born in 1959 and turned 59 in 2018. The sorrow was because of the resignation in his voice, when he talked about one of his ultimate dreams. He’d come to the conclusion, in his own mind, that one of his most cherished material goals would be impossible to achieve. The dream, was to own a particular style of home. The dream itself seemed as important as the lesson that flowed from the exchange, because a strategy to fulfill his objective, could have enabled him to acquire what he wanted. It was a stark reminder between the differences of planning and not doing so.
If it’s apparent that a plan would have enabled my friend to attain what he wanted, why then did he not do so? That question sits somewhere on the mind of every good person who chooses to become a financial planner. What does it take for people to take that often pivotal step to develop a strategy to attain their dreams, then retire comfortably and stay comfortably retired?
Is it the desire to consume? Maybe, because, after all, how many people do you know who live paycheck-to-paycheck because of their need to have what they want, right now? My generation became infused with the values of the ‘80s. It was the norm to spend, acquire, accumulate debt, then ignore the cost of what you wanted, for the rush that comes from getting something new. How many folks eat out, spend more than they should and throw-down a heavily worn credit card to pay for it? Here’s something to consider: say you spend five-dollars a day for a fancy coffee drink and ten-dollars a day for lunch. That comes to about 450-dollars a month. If instead you invested in a moderate-to-aggressive portfolio, the total, after 20-years, could be around $230,000. Maybe it would be better to brew coffee at home and pack lunch most days.
Planning helps make it possible for individuals to achieve what they want. It is a way to provide direction and without it, people – including my friend – may find it difficult to know what it takes to achieve financial goals, such as how money much to save, how much to invest, or how aggressive to be in relation to the markets. Then there’s this, people usually are not overjoyed about the financial planning process. Seriously, on the scale of one to fun, most people think of it as zero. It doesn’t have to be that way. If done correctly, it can be empowering, exhilarating and wonderfully assuring, because you can envision, then know how things are going to turn-out for you. Some of us in this business occasionally say that people spend more time planning vacations, or parties than their own financial well-being. Part of the reason for that phenomenon might have to do with a lack of understanding.
Financial planners carry a designation. Many people are familiar with the letters, CFP® which stand for Certified Financial Planner™. There are others too. Mine is the RICP®, Retirement Income Certified Professional® and I’m about half way through the CFP® curriculum. My wife and business partner holds the ChFC®, which stands for, Chartered Financial Consultant®. She’s recently completed the coursework the BFA™ designation, short for Behavioral Financial Advice™. She will attempt to pass the CFP® exam this Fall. These designations and others indicate that the person who earned them, has acquired a unique set of skills.
Yes, it takes money to hire a Financial Planner, but how much? The deeper question may be, what’s it worth to find out when you can stop working and not run out of money? My partner and I have structured our practice so that the assets we manage cover the cost to develop a financial plan for clients. We did it this way because we believe it’s extremely valuable for folks to get a game-plan together. Whether or not you work with us, we believe it’s useful to work with someone to design a plan to help you get what you want, which sometimes includes the money for a particular style of home that you’ve always desired.
My 59-year-old friend is lucky – he’s in a profession that could enable him to work another 15-years, or more. It’s possible that he can achieve his dream, with the proper planning. The only question is, will he develop a plan, or not? My hope is that he will, but I have no control over that, though I wish I did. I want things to go well for my friend because I have attained the ability to help assure that he can accomplish his dreams. Wish me luck, when I speak with him again.