Everyday life creates a challenge in accomplishing all the things you need to do. Stop and think about it—you have careers, relationships, children, finance, fitness, nutrition, religion, and maybe time for yourself. The problem is that all of these parts of our life are extremely important, but we are influenced and controlled by the “squeaky wheel syndrome.” The demands of careers, relationships, and children consume the majority of our time and attention because of the personal requests. Fitness, nutrition, and religion get some of what is left because it makes us feel good. Finance and following a financial strategy get the least attention.
Creating your financial goals and developing your financial strategy is extremely important. To do this as early as possible allows you to help accomplish these goals with few dollars because you have the power of compounding rates of return on your side. Take some time to develop a good understanding of the different methods you can use to grow your assets and accomplish your goals. Another strategy is Dollar Cost Averaging*, which is regularly funding your investments over a longer period of time.
Thinking back to my early twenties, I thought there was no savable income. Then, once you get married, the amount of purchases increases—furniture, cars, and keeping up with the Joneses leave little to save. That, in turn, is the idea a little bit of money on a regular basis is a successful strategy. For years I would talk to clients who would say, “I have $100,000 dollars coming in; I will be over to see you.”
Six months later you would run into them and ask what happened, to which they would say that they needed a new car, they went on vacation, and they bought some furniture. The problem with this is not only is the money gone, but what it could have grown to over the coming years—double or triple in value. Also, get a financial professional with whom you have chemistry that can help keep you focused and meet every three to six months.
The key is to start with whatever you have, start as early as possible, find guidance from someone you have chemistry with, and meet on a regular basis. This will help you accomplish being the gladiator that you are.
*Dollar-cost averaging does not assure a profit nor does it protect against loss in declining markets. To be effective, there must be a continuous investment regardless of price fluctuations. Investors should consider their financial ability to continue to make purchases through periods of low price levels.
About the Author: Tim Mahoney
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