Financial planners see it all.
Not only do they get an inside look into their clients’ spending, saving, earnings, and investments, but they can see past the numbers to the people behind them: their clients’ ambitions, fears, priorities … and where they need some help.
Below, eight certified financial planners answer the question,”What’s your favourite, go-to piece of advice to help people start growing their wealth?”
content=”‘I always tell clients that investing should be easy and boring at the same time. The more complex and the more active you are can get you into trouble.
‘Investors are their own worst enemy when they let their emotions make decisions for them. How much you save is much more important than what you’re investing in.’
— Michael Solari, CFP, Solari Financial Planning”
caption=”Solari shares the above chart, which shows that ‘how much you save is much more important than what you’re investing in.'”
content=”‘Sign up for your 401(k) if you have a match. Contribute enough so that you at least get the match from your employer. If you don’t, you’re missing out on free money! Also, start a Roth IRA.
‘My other tip is for people to invest in their career. Your income potential is your greatest asset while you’re young! This means you should negotiate your new salary, start a side hustle, learn new skills that make your more valuable, know what you’re worth, and don’t be afraid to hustle!’
— Sophia Bera, CFP, Gen Y Planning”
source=”Flickr / David Wall”
caption=”Take advantage of your 401(k), if your employer offers one and matches.”
content=”‘Have a plan.
‘Create a formal, written, financial plan that includes a list of your financial goals and put together an automatic savings program specific to achieving each objective. After all, ‘a goal without a plan is just a wish.’
‘A young married couple recently came into my office for their first meeting with a financial planner. They had been working on curbing their spending habits and had just paid off all of their credit card debt over the course of the previous year. They were excited to be debt-free and were looking to get started building and growing their wealth.
‘We began the meeting by discussing their financial goals and ranking them in order of importance:
1. Having an emergency reserve fund with six months of expenses set aside.
2. Putting money away for their retirement.
3. Saving up for a down payment on a home.
4. Saving for their daughter’s college education.
5. Having some money set aside to help care for ageing parents.
‘We then reviewed their monthly cash flow (budget) and determined that they were comfortable saving 20% of their net take home pay towards achieving their goals. To simplify the process, we implemented an automatic savings program. They both received direct deposit of their paychecks into their checking account on the first and fifteenth of each month.
‘Consequently, on the second and sixteenth of each month, we directed 20% of their pay from their checking account towards investment accounts specific to achieving each of their goals. By setting up an automatic electronic deposit program, this simplified their saving and budget process. ‘This is so easy, we don’t even notice that the money is being saved. Why didn’t we start doing this years ago?’
‘By living within their means and following a formal written plan based on their goals, they began saving and investing consistently. Their money could now grow and compound towards achieving their financial objectives.’
— Joe O’Boyle, CFP, Voya Financial Planning”
caption=”Make a written plan for your finances.”
content=”‘Really focus on figuring out what drives you, and what you want from your life. Too often we get caught up trying to make a bunch of money, and end up completely miserable.
‘Finding a balance between what you love, and what will pay the bills, is the ultimate challenge but one that is incredibly important. Once you find your passion, figure out how you can improve yourself to earn more money, provide more flexibility for yourself, and ultimately live your great life.’
— Alan Moore, CFP, Serenity Financial Consulting”
caption=”Find a balance between what you love and what will pay the bills.”
content=”‘My advice is rooted deeply in my financial beliefs.
‘I believe two things to be almost universally true: One, that is almost impossible to be unemotional about our own finances. The second is that it is our direction and planning, not our intention and hopes, that ultimately determines our destination and purpose in any area of financial life.
‘I serve my clients in helping them to objectively assess where they are actually headed financially, and how that relates to their investment and tax planning goals. My advice is simple: Work with a qualified financial professional to help achieve your financial goals.’
— Jordan Niefeld, CPA, CFP, Raymond James Financial”
caption=”If you need a hand, ask a professional to help.”
content=”‘Before you chase wealth, define what wealthy means to you. Being wealthy does not have to revolve around money. You can have a wealthy relationships with family and friends, or a wealthy experience in travel and adventures. Having wealth can also be defined as having a lifestyle business that replaces the traditional 9-5 job.
‘Don’t sacrifice your life, family, and friends to chase something if you aren’t 100% confident you really know what it is.’
— Jeff Rose, CFP, Alliance Wealth Management”
source=”Flickr / Kacper Gunia”
caption=”Define what wealth means to you before you pursue it.”
content=”‘The absolute best advice I can provide for anyone who wants to start growing their net worth is to automate their deposits into their investment account. By ‘paying yourself first’ you almost guarantee success. At least you are much more likely to hit your savings goals compared to those who only invest if there is money left over at the end of the month.
‘People who approach investing that way typically don’t have money left over so they find it very hard to leave the starting block. Investing for the future should not be relegated (to the end of the list) — it should be a priority. By investing first and only spending what’s left over, you regulate your spending and put that money aside for your future thereby killing two birds with one stone. I can’t think of any better advice.’
— Neal Frankle, CFP, NealFrankle.com”
caption=”Pay yourself first, so you can spend you time doing the things you enjoy.”