Think investing is expensive? What about the cost of not investing?
By As a wealth advisor, I have many conversations with young and more seasoned families (not old; age is just a number) who are interested in what I do but have one major misconception about investing: You need a lot of money to start.
This could not be further from the truth. It’s a misunderstanding that I want to educate more people about. A janitor in high school posed a question to me in my senior year: “Do you always want to work for your money, or do you want your money to work for you?” At age 18, that was the most powerful question I had been asked, and it made total sense. Saving your way toward your goals is tough. However, investing along the way can make this path easier, meaning the best time to start investing is right now. Procrastinating on investing is a problem that has plagued us for generations and hindered many people towards the financial progress they desire.
A recent study from the AARP found that 62% of Americans over 50 have never consulted a professional to help them plan for retirement — around one-third said they don’t have much savings and can’t afford to hire an advisor. The National Institute on Retirement Security reports that the typical Gen X household has just $40,000 in retirement savings. And these are the folks closest to retiring — imagine how much lower those numbers might be for Millenials and Gen Z! The common thread among families and individuals I have worked with is the uncertainty around their options for investing efficiently.
- What type of account do I open?
- What company or companies should I be buying?
- How much should I be saving within my retirement plan at work?
- Which investment options should I choose within my individual retirement account?
These are all examples of questions that I get asked weekly.
No matter your income, budget, or future life plans, the earlier you start making your money work for you, the easier it will be to care for yourself and your loved ones. The power of compound interest is amazing to see in real life and is a topic that isn’t talked about often enough. Even taking $50 or $100 a month and setting it aside for your future self can make a big difference over time. In my experience, most people do not miss this money from their checking accounts. They continue living life just as they were.
After starting now, the second key to wise investing is working with somebody you can trust to manage your wealth and help you reach your investment goals. You may be savvy enough to do this on your own in your spare time, and that is great if you enjoy doing that. I work with plenty of DIY investors with their overall financial plans and add value in other areas of their financial puzzle. Being a wealth advisor provides me the opportunity to see just about every way a person or family could make a financial mistake. My passion is simple: To educate people on their options and help them avoid a potential financial pitfall.
While there is a cost associated with hiring a financial planner, it’s essential to consider the alternative—what is the cost of NOT having a financial planner? At Family Financial Partners, we have fee-based plans for every phase of your life. These are easy, affordable packages that can get you started on not just investing, but budgeting, insurance, family planning, and more.
Contact me or anyone else on my team today to take that first step so that when retirement comes, you’re ready.
All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Although there is no assurance that working with a financial professional will improve investment results, a professional can evaluate your objectives and available resources and help you consider appropriate long-term financial strategies.
Article by Dillon Harper, Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.