If you’re looking for white bread, saltine cracker, “basic” financial advice, it is out there… in spades.
The same lame-O advice has been doled out since the early ’80s:
Buy term. Invest in mutual funds. Pay off your home in full. Get (and stay out of) debt… unless it’s school loans… then go into as much debt as humanly possible because magic jobs exist for the price of a degree.
And on and on and on.
All you gotta do is read… well… ANY study done on retirement and personal savings to see how it’s worked out.
Average savings at age 20 is $0 – $5,000. Average savings at age 30 is between $30,000 and $50,000… by the time folks are 65, average savings STILL hasn’t topped $200,000.
How the fugk do people retire on that and Social Security and still have a life?
I mean seriously. What are they doing? Eating cat food?
I have a theory why this situation exists in America: most financial plans lack substance.
Here’s what I mean…
My grandma used to make me fluffernutter sammiches when I was a kid. In case you’re not familiar, a fluffernutter is a sandwhich made with white bread, peanut butter, and marshmallow fluff (basically, semi-liquid marshmallows in a jar).
In other words… a sugar sandwich.
I shudder to think about all the damage it did to my body.
Inflammation… plaque… tooth enamel damage… cholesterol… blood sugar problems… etc etc.
Everyone knows why sugar sammiches aren’t good for you. They have no nutritional substance.
Anyway, financial plans lack the same kind of substance… because they’re based on hypothetical projections OF THE FREAKIN’ PAST instead of current realities and realistic futures based on CURRENT market prices.
You don’t think those fancy computer programs financial planners use can actually predict the future, do you?
Now don’t get me wrong… I’m not saying investment projections are completely worthless… I do them sometimes…
I always tell clients that these are hypotheticals and not to rely on them as gospel because stuff always changes from year to year. We just don’t know what the future holds…
And therein lies the problem with (almost) every financial plan.
The assumptions… things no one really knows how to predict on an individual level.
They’re working off statistics and probability… which is why they can get away banking on averages and hypotheticals.
They have position sizing (lots and lots of cashola) and a time horizon (length of time they’re investing) you don’t have.
Not so much.
ANyway, if hypothetical investment projections are so “useless,” why use them at all?
Projections can be used as a reference point of sorts… and… if the advisor is a smart whip… then that person can use it as a way to close the gap between what a client has and what they need.
Anyway, it’s completely ack-basswards from the way most advisors operate… but it’s the only way I’ve figured out how to use projected returns in an honest, accurate, way.
By the way, when you become a client, not only will I show you a non-“basic” way to grow your savings every single year (without losing money)… I will share this “course correction” process with you if you so choose to exploit my time and resources during an annual review.
If you already have a financial plan… there’s a good chance you can use this method to fix what your current advisor isn’t fixing for you right now… and do it without touching any of your investments.
For more details on how to take advantage of my services and how to get started, hop on my email list.