Welcome to the 16th issue of Metrix that Matter, a weekly newsletter from WEALTHMETRIX that helps you focus on what matters most for building and sustaining wealth. Every Saturday, we share an educational essay with actionable takeaways to guide you on your journey to financial independence.
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What you’ll learn in this issue:
- Why you need to invest in your future as much as your children’s
- Why your children need your knowledge more than your money
- Where to start improving your financial situation
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As parents, we want the best for our children.
We want them to succeed in everything that they do. To have all the opportunities we had, plus the ones we didn’t. To grow into adults that reach their highest potential.
So, we invest regularly in our children, giving our time, our energy, and certainly our money.
If you took inventory of all the ways you invest in your children today, I’m sure it would be a substantial list, both financially and non-financially.
Just think about all the activities they’re involved in, whether it’s dance, soccer, band, or cheerleading, to name a few. From a purely financial standpoint, these can cost thousands of dollars per year. And while you can’t put a price on it, the time investment may be even more valuable.
Now I’m not here to judge the activities your children participate in. Every single one of these can teach them valuable lessons that will pay dividends for the rest of their lives.
Instead, I want you to think about whether or not you are investing the same amount of time and money into your future as well.
Do you have hopes and dreams for yourself like you do for your kids?
Are you actively working towards those hopes and dreams?
If not, you could be setting your kids up to take care of you financially in the future.
Is that your plan? To move in with your kids in retirement and financially rely on them? If so, do your kids know that is your plan?
Don’t give up on yourself
Oftentimes, I meet with parents in their 40s or 50s who have poured everything into their kids for the past 10 or 20 years, but have sacrificed their own financial future.
They share a sense of guilt that their finances aren’t in a better place and feel like they should be much further along than they currently are. They also assume it’s too late to fix their situation and that they’ll never be able to retire.
So, the parents naturally shift their focus to their kids’ financial future. They express a desire to invest money for their kids so they don’t end up in a similar situation.
Although the parents have good intentions, what I encourage them, and what I want to encourage you, is to not wave the white surrender flag on your future. Your finances may not be where you want at the moment, but it’s not too late.
You can start taking steps towards your financial goals, while also setting your kids up for success in the future.
Your kids have time to grow
Your children have a lot more time to build wealth than you do. What they don’t have is the knowledge you gained through life experience. So, rather than investing money for them, teach them how to invest for themselves. Help them learn good financial habits on saving, investing, spending, and debt. That will take them much further in life than a financial gift or inheritance.
Imagine if you can get your children to save $300 a month starting at age 25. With an 8% annual return, they would accumulate more than $1 million by the time they turn 65.
But as a 45-year-old parent, you’re likely going to need a lot more than $300 a month to reach that same $1 million target in the next 20 years.
Your focus should be on aggressively saving as much as possible to make up for lost time.
So, where do you start?
There’s a long list of potential ways to improve your situation, but they all start with a clear understanding of where you are today. Then, it’s all about taking action, no matter how small. Here is a short list of potential ways to start improving your finances:
Track your spending with automated apps or tools to figure out your current monthly cash flow surplus or deficit.
Set up automatic recurring monthly savings into the right accounts – bank accounts, retirement accounts, taxable brokerage accounts, etc.
Protect yourself and your family. Obtain the proper amount of insurance coverage. Have the tough estate planning conversations. Make sure every account has beneficiaries.
Above all, make it a priority
The most important thing you can do is to start making your finances a priority.
People like to delay and avoid this as much as possible. Then, when they’re knocking on the door of retirement, they wish they would have paid attention to their finances 20 years ago.
It doesn’t matter how small you start. Just start.
Take the first step.
In 20 years, you’ll feel relief instead of regret.
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READY TO IMPROVE YOUR FINANCES?
Thank you for reading. If you are ready to take the first step towards improving your finances, I invite you to click the link below to gain access to our financial planning tool, Elements.
After signing up, you will be guided through a series of basic questions about your income, spending, debt, and account values. Once complete, Elements will provide a snapshot of your current financial health, as shown below.
You will then have the opportunity to schedule a complimentary meeting with me (Zoom or in-office), where I will review your current situation and discuss a few ways to make improvements.
CHECK YOUR FINANCIAL HEALTH IN 10 MINUTES
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WEALTHMETRIX
https://www.mywealthmetrix.com/
(972) 267-7526
102 S. Goliad Street, Suite 101
Rockwall, TX 75087
16475 Dallas Parkway, Suite 840
Addison, TX 75001
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