By When I first got married and was working multiple jobs, I remember thinking, that if I could just have a household income of $100,000, I’d be set for life. I’d never have to worry about money again. That guy — the one who’s doing your financial planning — didn’t understand inflation, or the price of children, or HOA fees, or anything else at the time. These are things that I had to learn, not by being told, but by experiencing it.
Early in my financial advising career, I was introduced to the concept of the Hierarchy of Financial Needs, and what I didn’t realize at the time was that I was at the first level, which is financial security. I just needed to be able to pay the bills and have some cash left over to enjoy life. I didn’t think about acquiring assets or building my retirement or estate planning. I just needed something to eat and somewhere to sleep.
But as we grow in our net worth and accumulate wealth, we begin to learn that the real goal is not financial security, but rather financial freedom. At Family Financial Partners, we’ve seen clients who earned modest incomes—often under $60,000 a year—accumulate meaningful retirement savings through consistent habits and long-term planning. Much of what you read today may suggest that the American dream of financial freedom is unreachable, but I’m here to tell you that is not the case.
The real story is that, if you can defer gratification and have a solid plan, reaching financial freedom can be more achievable than you might think. The key is to start saving money early so that it can compound over time. If you’re reading this and you’re in your 40s or 50s and you haven’t started yet, it’s not too late. While you may have less time to benefit from compounding, you likely have more financial resources now than you did in your 20s. The solution is to save more—and do so consistently—which can still put you on the path toward financial freedom. (Reach out if you’d like us to help you with any aspect of your pre-retirement plan.)
But this article isn’t about financial freedom. Many people envision financial freedom as the top of the hill. But once they get to the top and all the saving has been done and the bills have been paid, they often realize that the real journey is just beginning. The question becomes: What do you do with the time you now have? Once a person gets to financial freedom and is no longer worried about paying the tuition or car bill, I often find that there comes a point where they say “There’s got to be more.”
In my limited life experience, I know what it’s like to lose a best friend, grandparents, clients, golf buddies, and even a parent. Every time I’ve experienced loss, it’s made me ask two questions: How do I want to maximize my time on earth, and what do I want my legacy to be?
Often, new clients look uncomfortable in that first meeting when I ask them if they have a will or any other legal documents. That’s completely understandable. After all, if you’d asked the younger version of me at the financial security level what an estate plan was, I’d say it was something for old people to do! I truly had no concept of what I was missing.
Your estate plan is one of the most important things you can have in place. I can assure you that having your legal and estate documents in order is something that can provide additional peace of mind — not only for you but for your loved ones.
If we are fortunate to live long enough, we eventually come to a point where we understand that our time here is beautiful but finite. It is a gift to yourself to have a plan in place —one that supports your retirement goals, enables charitable giving, and ensures your assets are passed on to the people who matter most to you.
So, I challenge you to give us a ring if you don’t have a complete estate plan or need to review your existing one; considering modifications based on how your family’s needs may have changed.
Lastly, one piece of homework for you.
My question is, once you’ve checked off this to-do box, what are you going to do with that extra time in retirement? Email me — I’d love to hear your answer.
Ps. If it’s golf, I’ll make us a tee time. If it’s sailing, let me know which dock!
Family Financial Partners does not provide tax advice, but we do coordinate our services and work together with our clients’ professional advisors. Estate planning services provided in conjunction with your licensed legal professional.
Article by David Smyth, Senior Partner and Wealth Advisor at Family Financial Partners — a financial services firm in Lexington, Kentucky.