6 Steps to Securing Your Money's Future

 

As we truly start to dig into 2021, we start fully committing to the goals we set at the end of December 2020. Because let’s just be honest — a lot of times, January is a trial period! I have seen so many people on social media say that February 1st was the beginning of the year, SO I’m rolling with that with y’all friends!


So now that February is here and goals are being tackled, we should talk about our financial goals too. My husband just so happens to be a financial planner, so he has been so kind to contribute this post for you guys today! Thank you Marcus Johnson, from Johnson Capital Planning, for contributing this post. We hope that you, as my readers, will find it to be very informative! Let’s get right into it!



When we think of securing our future, I’m sure so many thoughts come to mind. I ask my clients all the time, what does your future look like? 100% of the time that answer is followed with “wanting or having a lot of money”. I usually follow that up with wanting to dig a little deeper because wanting to have it and not planning for it — is a set up for disaster.  We see it time and time again with people who win the lottery or people who come into a windfall of money. They go broke because they don’t have a plan for their dollars or know how money works. The idea is that we want our money to work for us, so later we can enjoy the fruits of our money’s labor. When it comes to money, I believe we make it more complicated than it has to be, so I comprised 6 steps to help secure your moneys future.



Have a Clear Idea of What You Want Your Money to Do

 

Develop a solid plan for what you want to do with your money.  This starts with writing down your ideas and goals on paper. We want to see it so it’s clear as day. Always make sure that your goals are specific and not generic. We must get away from saying things like “I want to be rich” or “I want generational wealth”. Of course we want those things, but let’s be more specific in our ideas. More specific ideas would be things like buying a home and putting down 30%, or paying off 100% of my debt. If the goal is to buy a home or pay off debt, writing it down keeps us accountable for the things we say we want. It also gives us our “why”. I tell clients all the time to remember the “why” because that helps us stay on track for the end goal.  We also want to be realistic in our expectations of these goals. If we have 250,000.00 of debt and we make 50,000.00, paying that off in a year is probably not going to happen. Be clear in your planning stages and don’t caught up in a time frame. Your plan is your plan, this is not a one size fits all. It’s more important to actually follow through with your plan, than it is how fast you did it. 



Automate Your Savings and Hide it From Being Stolen by You

 

 

Automating your saving every month is a great way to build wealth. It forces you to “pay yourself first”, it keeps you from overspending, and it takes the responsibility of saving out of your hands. Too many times, we say we are going to start saving, open up a savings account, and it ultimately turns into another checking. This happens because the first time we feel that our account is low or an unexpected situation happens, the first place we go is this savings. I urge clients to move their savings into a vehicle that they don't have as easy access to such a brokerage account, etc. Not only does that hide your money from yourself, but also gives you the opportunity to invest your savings, which in my opinion is the best option. We want to have this money invested because it protects us from inflation and makes our money work for us. Money sitting in your savings account at your bank is not working for you because banks are paying little to nothing just sitting there. Always consult with a financial planner or advisor when investing, but it’s so important that our long-term money is working hard for you. Automating your savings while having it invested will create compound interest which is the interest calculated on both your initial principle (your savings) and the accumulated interest (interest from the investments) from different periods over time. Compound Interest is what creates wealth overtime and why Albert Einstein calls it the “eighth wonder of the world or man’s greatest invention”.  



Diversify Your Investments and Income Streams 


It’s like that old saying goes -- never put all your eggs in one basket. It's that simple! The stock market and real estate market are hot right now and we should participate but we also want money in places not subject to market risk, inflation risk and real estate risk. We should make a habit of spreading the wealth amongst different investment vehicles because this ensures us that our risk is spread out. All investment vehicles have ups and downs and by spreading your money throughout different assets, it helps aid in not losing everything when things go bad. The same is true when it comes to our income stream. Having only one income is too close to not having any at all. We have seen with the pandemic the importance of diversifying your income because so many people and businesses have folded. Contrary to belief, it's okay to have a 9-5, but also have some side hustles that aid to you having multiple income streams.  Having multiple incomes not only increases your income, but it also protects you from a downturn in the market. Diversification is the protection against ignorance.



Develop a Long-Term Retirement Plan

 

Over the last few years, I’ve heard many people say that they don’t want to retire or that they haven’t thought about it. The truth is no matter how much you love what you do, there should always be an exit strategy. There is a huge difference between working because you have to versus working because you want to. Having a solid retirement plan is essential to making sure that in your later years, you are prepared. A successful retirement is all about replacing your income today, in the future. The more guaranteed income you have in retirement, the less worries you will have. Most clients number one fear in retirement is running out of money. Developing a strong plan can take the worries out and you can actually enjoy the fruits of your labor. I urge clients to start by asking themselves several questions, such as how much money do you think that you will need per month and per year? What does a day look like for you in retirement? Are we traveling often? If so, domestic or international? These questions help frame our mind on things we should be doing today. Having an effective retirement plan will let us know when we should take social security, if you should work longer than expected, when and how you take your money from your investment vehicles, and also prepare us for unexpected health expenses. Working with a financial planner can help you build a true retirement plan. A retirement plan is not a do it yourself project. The earlier you start planning for retirement the more the likelihood of an enjoyable retirement.



Buy Life Insurance to Create Wealth

 

Life Insurance is a great tool if used properly because it can create wealth for your family and loved ones. Life insurance is the best way to create generational wealth for your children, grandchildren and charities because the money is tax free. Life insurance can always be used to build cash value while protecting yourself from real estate, stock market, and inflation risks if used properly. Some polices that build cash value are often referred to as retirement supplement vehicles because the cash you have built, you have access to take out tax free! That is huge for so many people because it gives them another bucket of money to pull from in retirement that’s tax free. The more buckets you have in retirement, the better because it gives you a huge bonus. It goes back to your “why”? There are so many different ways to utilize life insurance, but the one that works for you depends on your particular needs or wants. In addition, if something happens to you or loved one(s), the benefits your family will receive will help take the burden of financial stress off, and allow your family the time to grieve. We have come so far from the 10,000 and 20,000 policies. Nowadays we have access to so much more and I truly believe that if we start buying bigger policies, we can create wealth for the next generation. If the goals is to leave a legacy buy an insurance policy. 



Protect Your Main Investment (Which is You)


All of these steps are null and void if we don’t take care of ourselves. Take time for yourself to mediate and get your mental health in order. I have found over the years that a clearer mind is better for achieving any goals you have set out for yourself. Invest in yourself with better diets, exercise, and continue to feed the brain with knowledge. The more applied knowledge we have the more likely we will achieve said goals. Remember that most of the stress you have in your life is due to the pressure you have put on yourself.  Take a deep breath and enjoy the ride! Start with your idea, and then put the plan to work! 

 

 

 

Thank you again Marcus Johnson from Johnson Capital Planning for contributing to this post! What are some steps you and your family are taking to secure your money's future? I'd love to read about them in the comments below!

 

Thank you so much for reading!  

9 comments

  1. 100% believe in securing your money's future! That's what I've been doing since I graduated from college - eeek that's like 11 years ago now? But it is all worth it and def shared great tips!

    www.rdsobsessions.com

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  2. These are really great tips! Thanks so much for sharing, I'm definitely saving this post to reference later as well. Xx.

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  3. I need to bookmark this to read again ann again. Great tips!

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  4. Great tips and a valuable resource. Thanks for sharing! xoxo, Sarah

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  5. This was such a helpful read! My husband got really into finances and learning about everything we could do with our money in the last year. He's a big Dave Ramsey fan and the only books he owns are ones on finances now haha. It's so good to continue learning and growing!

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  6. This was such an interesting and informative read, thanks for sharing!

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  7. This is such a helpful post! I definitely need to add in some of these tips!

    Xo, Steph

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  8. These are really great tips! I'd love to look more into investments. Seems like the way tot go!

    Lizzie
    www.lizzieinlace.com

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  9. These are great tips! During the pandemic we've been working hard to pay off debt since we're not traveling or doing anything.

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