November 14, 2023 • 26 mins
James walks through a framework of how you ensure that your legacy goals include more than just leaving a chunk of money to your kids when you're gone.
He explains the key concepts that can help your child develop strong money management skills. From starting early to diversifying your investments, learn how you can help set your child up for financial success
Questions Answered:
Why is it important to start investing for retirement early in life?
How does early investment preparation not only benefit your retirement but also your financial well-being in your younger years?
Timestamps:
0:00 Intro
3:42 Here's where to start
7:36 Owner vs lender
13:46 Diversification
15:42 Starting early
18:26 Why it matters
21:53 Where are you investing?
25:11 Questions to consider
26:08 Outro
Create Your Custom Strategy ⬇️
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
In my job as a financial advisor, I am talking
to a lot of people who arepreparing to retire soon, and
one of the things that I, ofcourse, am asking them is what
are your goals for retirement?
What do you want this to looklike Now?
Not always, but frequently.
People will often say thatleaving some money to their kids
one day is important to them.
That's one of their goals.
Depending on your personalphilosophy, this can be a great
thing to do, but as we getdeeper into that conversation,
(00:22):
I'll then ask them I'll say whatwould happen if their kids
inherited all of their moneytoday.
Would that help them or wouldthat hurt them?
A lot of people will thinkabout it and they'll admit that,
while they have incrediblechildren, they're not sure if
their maturity or moneymanagement skills are yet to a
place where they'd be okay toinherit this money.
So they'll realize thatfinancially supporting their
children is great if done theright way, but only if they have
(00:44):
healthy money management skills.
So leaving a financial legacyto your children is more than
just leaving an inheritance orhelping with a home purchase or
even just an outright financialgift.
The best financial gift you canleave your children is an
understanding of how to wiselymanage money.
So in today's episode, readyfor Retirement, we'll walk
through a framework of how youcan think about doing that to
(01:05):
ensure that your legacy goalsinclude more than just leaving a
chunk of money to your kidswhen you're gone.
This is another episode of Readyfor Retirement.
I'm your host, james Cannell,and I'm here to teach you how to
get the most out of life withyour money.
And now on to the episode.
Today's episode was prompted bya listener question, and this
(01:26):
listener question comes from Tim.
Tim says the following Hi,james, I've enjoyed listening to
your podcast.
They are very helpful.
However, this question isgeared towards my daughter, who
will be graduating from collegein December.
She has offers, so she'll bejumping into the workforce right
away.
Very broad question what wouldthe recommendation slash
retirement strategy be for a 22year old just getting started?
Thank you very much, tim.
(01:48):
Well, tim, thank you for thatquestion.
A lot of times we are so focusedon our own planning, which is
obviously good we want to makesure that we're in a position to
have a financially secureretirement, to be able to do the
things we want to do, tominimize taxes, to protect our
legacy all these various things,and then we start to realize
we've learned what we've learnedover the course of maybe years
and decades and, as our childrenare getting started, how can we
(02:10):
get them a leg up in terms ofunderstanding of what to do or
how to prepare for certainthings?
And this is something Iactually really enjoy talking
about, because once you knowwhat to do and you're starting
early, there's no limit to whatyou can create for yourself in
terms of the future you'retrying to build.
So, tim, thank you for thequestion, and this is exactly
what we'll be talking abouttoday.
(02:30):
There's a few things that Ithink are important to cover.
Now, when you're talking aboutfinancial strategy, what should
you be doing?
That very quickly becomes abroad question, with a hundred
different things you could talkabout.
What I like to do is I like tostart with the fundamentals of
how can you cast a vision forwhat your future could be like
if you begin doing the rightthings today, and how do you
(02:52):
focus on those big rocks the bigrocks being the things that are
going to pretty significantlymove the needle and then, once
you have those big rocks inplace, then fill it in and
supplement it with other details.
So, of course, we can't covereverything that I would tell a
22 year old just getting started, but we can cover the main
things that would be mostimportant in terms of casting
vision for what's possible andthen come on up with a game plan
(03:13):
for how to start working inthat direction.
And the other thing that I'lladd to that is, while these
things we're going to talk aboutyes, maybe this is geared
towards someone just gettingstarted, but the reality is
these are the foundations.
This is the truth that all ofour planning and investing in
strategies based upon, and sosometimes even for those of us
who've been doing this forseveral years and decades, even
(03:33):
this is a good refresher.
This is a good chance torecenter on why are we doing
what we're doing, because thathelps us even in our own
planning.
Here's where I'd start withsomeone getting started with
investing.
There's the question of what doI do with my money?
Now, assuming you're not goingto keep it in cash and maybe in
a bit we can talk about how muchcash is appropriate to keep but
(03:54):
you want to invest it, and whenyou're investing, get, what
you're doing is you're, ofcourse, putting your money into
things that you are expecting togrow for you.
Now, there are a whole bunch ofdifferent types of investments
that you can choose from, but ingeneral, the big question is do
I want to be an owner or do Iwant to be a lender?
What does that mean?
Well, if you own something soif you own a stock, for example,
(04:16):
you own that company.
So if you go out and buy stockin Apple, in Nike, in Johnson
Johnson, in McDonald's, inNordstrom, whatever you want to
buy it in, you are a literalowner of that company.
Now, it's you and millions ofother people.
So it's not as if you're makingmanagement decisions or
executive decisions, but yourvalue of your investment is
(04:39):
based upon the value of thecompany.
The company does better, you dobetter.
If the company does worse, youdo worse.
So you are literally an owner ofthat company, and I think it's
really important to remindourselves of that when we buy
stocks.
So often we're looking at whatthe Dow Jones is doing or what
the S&P 500 is doing or what theNasdaq's doing, and maybe you
see a big computer screen withall these flashing red and green
(05:01):
symbols, and it seems not thatfar off from walking through a
casino in Las Vegas and allthese flashing lights.
It's these things going up anddown in value, and it seems like
it's disconnected from realitysometimes.
Well, keep in mind when you arebuying a stock, you are
literally owning a company, andif you're buying several stocks,
you're literally owning severaldifferent companies.
(05:23):
I'm going to come back to thislater.
So that's option one is you arebeing an owner, versus.
Option number two is being alender.
So maybe you don't want to owncompanies, maybe, instead, you
want to lend money to companies.
Well, that's what a bond is.
If you purchase a bond and abond could be anything from
buying a US Treasury bill tobuying a bond in a big US
(05:44):
corporation or internationalcorporation what you're doing
when you're buying that bond isyou are lending your money to
that government or to thatcorporation.
Now, you're doing that because,in exchange for the privilege
of borrowing your money, thatgovernment or corporation is
going to pay you interest onyour money and at the end of the
maturity of the bond this couldbe after six months, this could
(06:05):
be after 10 years At the end ofthat maturity, whatever it
might be they're going to payyou back your money.
So if I buy a bond for $1,000and it's a 10-year bond and that
bond is paying, say, 5%interest.
I can expect $50 per year ininterest, assuming this
government or company stayssolvent, and at the end of the
10 years I can expect my $1,000back.
(06:26):
So that's me being a lender.
So the first decision you wantto make is are you going to be
an owner owning various types ofstocks, or are you going to be
a lender lending your money tovarious companies or governments
?
Now, there's huge implicationsfor what you're going to choose,
and here's why I want to startwith this Long term.
When you look at the performanceof the S&P 500, and, by the way
(06:48):
, the S&P 500, for those of youjust getting started or teaching
your children who are justgetting started, it's just an
index that tracks about 500 ofthe largest companies here in
the United States.
So if you want to say, how isthe market doing?
Well, there's thousands andthousands and thousands of
actual indices or quote unquotemarkets that you could invest in
.
So there's not one singularmarket.
(07:08):
All you have is a whole bunchof different publicly traded
stocks that you can invest yourmoney into.
So you have these groups likethe Dow Jones or like the
Standard and Pours, where theywill create an index, and the
Standard and Pours 500 or S&P500 is one of those indices.
If you track the performance ofthat going back several decades
, it's averaged about 10% peryear growth.
(07:30):
Now there's no guarantee thatit's going to continue growing
by that much going forward, butthat's at least something that
we can use as a baseline.
So in that decision, do I wantto be an owner or do I want to
be a lender?
Let's roughly use that 10%number as a proxy for what you
could have expected, at leasthistorically, for being an owner
, assuming you purchased largecompanies in the S&P 500.
(07:51):
Now compare that to being alender.
So if you're a lender, you'rebuying bonds historically over
that same period of time,depending on what bond index
you're looking at.
But if we just look at a kindof a broad bond index, you can
maybe expect to grow by about 6%per year growth.
Now, when you're looking atthat, to be very clear, you're
not getting 10% every singleyear by owning stocks, nor are
(08:12):
you getting 6% every single yearfor owning bonds.
That's an average return, butyou have a wide variation in the
terms of the actual returnsthat you're accepting, year by
year, more on that later.
Now, as a beginner, you look atthat and you might say that
doesn't seem like such a bigdifference growing at 10% versus
growing at 6%.
(08:32):
Well, it might not seem like awhole lot, but let's take a look
at the numbers.
Let's assume someone's gettingstarted and they're investing
$5,000 per year for 40 years.
One person decides to investthat money into something that
grows at 10% per year and theother individual decides to
invest that 5,000 per year intosomething that's growing at 6%
per year on average.
Well, after 40 years, both ofthese individuals they have put
(08:56):
the same exact number of dollarsinto their portfolio.
They both invested a total of$200,000.
But let's take a look at whattheir portfolios were worth at
the end of that time period.
The individual that invested andgrew at 6% per year.
So by proxy, let's say, thisperson fully invested in bonds
their money grew to about$774,000.
(09:16):
So of that, $200,000 wascontributions.
The remaining $573,000 wasgrowth on their money.
If we compare that to theindividual who instead invested
their money in stocks so theychose to be an owner instead
their money grew to over$2,200,000.
So of that, $200,000 was whatthey put in and over $2 million
(09:39):
was just growth on their money.
So you can see how extremethose differences are.
They have almost three times asmuch money at the end of the
day simply because they chose tobe an owner as opposed to a
lender.
Again, there's no guarantee thathappens going forward, but if
we're using history as our guide, or if we're trying to
understand the relationshipbetween owning stocks versus
(10:00):
lending your money to variousinstitutions or governments,
there's going to be a differencein terms of the return that you
can expect at the end.
Now you do need to educatepeople getting started that when
you're getting that return,it's not happening like
clockwork.
You're not getting 10% everysingle year.
You're not getting 6% everysingle year.
In fact, the S&P 500, let'saverage 10% per year
(10:22):
historically has never oncereturned exactly 10%.
So expect a wide range ofpotential outcomes.
You could be up 50% in a year.
You could potentially be down50% in a year.
That's the price of admission.
That's why you get a greatreturn over time is you're
accepting that short-termuncertainty of you have no idea
(10:43):
what that market is going to door what those investments are
going to do in the short term.
However, to me, that's thefoundation of when you're
teaching people who are justgetting started to invest
understanding the long-termdifferences between what you
choose to invest in.
Now I haven't even talkedspecifics yet of how much large
companies or small companies orinternational etc.
But just using that is a goodfoundation to see their
(11:06):
significant differences betweenwhat you can expect your
portfolio to do for you basedupon what you're selecting as
your investment and the reason.
I emphasize that so much is.
As humans, we have a tendency toinvest in what we know.
Here's a perfect example.
I remember taking a class incollege and in this class were a
lot of young people, verybright people In fact this was
(11:27):
at my MBA program so people thathad some experience, who
weren't brand new to thisinvesting thing.
And I had a class in fixedincome, so bonds, and in this
semester we spent the entiresemester understanding how bonds
work, how they're valued, whatyou can expect from them, and at
the end of the semester theteacher went around the room and
asked how much, based on whatyou've learned in the semester,
(11:48):
would you personally allocateyour portfolio to bonds?
And I remember thinking this iskind of an absurd question just
because we know a lot aboutsomething doesn't mean that it
makes sense for us personally toallocate to, and I was
expecting most people to say Iwouldn't allocate hardly
anything to bonds in myportfolio, given that all of us
were relatively young.
Here's the thing, though.
I said no, I wouldn't allocatea single dollar to bonds, but
(12:10):
most people I don't thinkthere's a single other person in
the entire class that said theywouldn't put any money into
bonds of their own personalportfolio, and, in fact, the
average person was saying theywould allocate anywhere between
20% and 100% of their portfolioto bonds.
And it struck me why on earthwould people who are so young
and have so much time until theyactually need these dollars do
(12:33):
anything with bonds?
And the answer was because theyhad just learned about them.
Now they felt really familiarwith them, they understood the
intricacies of them, and itshowed me a very important
lesson, which is we tend to putour money in things we
understand, regardless of howappropriate that specific
investment happens to be for ourunique goals.
(12:55):
So, as you're understanding this, as you're understanding the
various options, don't just putmoney in things you understand.
I don't care how well youunderstand real estate or bonds,
or stocks or alternatives oranything.
Understanding is just one partof it.
What you really want to know iswhat's the best one of these
investments to help me reach mylong-term goals, and that comes
(13:15):
from understanding whatpotential return you might
receive from each of theseinvestments and then calculating
that out, projecting that outto see what will this do for me
and is this the best thing forwhat I'm trying to do.
So be an owner versus be alender.
That's the most important thingyou can do.
To start is understand whatyou're going to be, and,
generally speaking, the youngeryou are, the better off you're
(13:35):
going to be owning stocks asopposed to owning bonds.
But again, that's always apersonal preference.
Hey everyone, it's me again forthe Disclaimer.
Please be smart about this.
Before doing anything, pleasebe sure to consult with your tax
planner or financial planner.
Nothing in this podcast shouldbe construed as investment, tax,
legal or other financial advice.
It is for informationalpurposes only.
(13:56):
The next thing I would talk toif someone's just getting
started with investing ishelping them understand the
importance of diversification.
Diversification sounds like oneof those things that you do if
you want to be boring and if youwant to underperform the market
.
That's the general thinkingabout diversification and I push
back against that whenever Ican, because diversification is
done to maximize your odds forpotential success.
(14:19):
And I say that because if youlook at the market over the last
50 plus years, on average, twoout of every three stocks in the
market and by market I'mdefining it in this case as the
Wilshire 3000, so 3,000 stocksin the United States two out of
every three of themunderperformed the market.
Yes, how on earth can that be?
(14:41):
How can the average stockunderperform the stock market as
a whole?
Isn't the average stock?
It's gonna be 50-50, halfoutperformed, half
underperformed.
No, and the reason for this isthe companies that do outperform
.
They tend to be what's drivingthe performance of the market as
a whole.
So if you miss out on those topperformers because you're
trying to pick maybe one or twoor three stocks to be the
(15:02):
entirety of your portfolio, youhave a pretty significant chance
of underperforming the market.
So when I'm talking about theS&P 500, that's saying don't put
all your money in one stock Ifyou simply own one index.
Now, all of a sudden, you'reowning 500 plus stocks and
there's actually 505 companiesin that index.
Don't even stop there.
Do you put some money insmaller companies or
(15:23):
international companies, andwhat you're doing is you are
both removing some of the riskfrom your portfolio, but you're
also increasing your returnpotential.
By not just owning one thing ortwo things or three things.
You're increasing your odds ofsuccess over time, which is so
important to do as a youngperson getting started.
The next thing I would then talkabout is the importance of
(15:44):
starting early.
We just went through thatexample where we said what would
happen if, for 40 years, youinvested $5,000 per year and
grew at 10% per year.
You saw that money turned intoa lot more money.
That took the portfolio valueto over $2.2 million after 40
years of doing that.
But the pushback and thisrightfully so, maybe from
younger people getting startedis why on earth would I be
(16:05):
thinking about retirement?
You know, I maybe have studentloans to pay off.
I just graduated.
I want to have some fun, I wantto be able to save for a home,
I need to purchase a car, I needto have some money to live on
All valid points.
But here's where I like to showpeople when you're saving money
for retirement, it's not justfor your 60 yourself, for 65
year old self or 70 year oldself.
It's also for your 30-year-oldself, your 40-year-old self,
(16:29):
something that seems a lotcloser, a lot more tangible.
People say well, what do youmean by that?
When I'm putting money into a401k or Roth IRA or whatever it
is, isn't that money forretirement?
Yes, that money is forretirement.
But here's what I mean.
Let's take a look at example.
So, tim, you mentioned thatyour daughter.
She's 22 years old and she'sgetting started.
I don't know how long she wantsto work when she wants to
(16:50):
retire.
I guess she probably doesn'teven yet at this point.
Most people getting out ofcollege have no idea the day
that they actually want toretire.
But let's walk through anactual example here, tim.
What if you walked your daughterthrough this and said look,
let's just assume for a secondthat you're going to work until
65, just to use that as astarting point and I'm going to
make the assumption that you getout of college and you are
(17:12):
earning $50,000 per year, justto use a nice round number and
I'm going to assume that you'resaving 10% of your salary for
retirement.
Now, I don't care if this comesfrom your contributions or an
employer's contribution.
You know, for example, maybeyou're putting 7% into a 401k
and an employer's matching 3%.
However, you get to that 10%I'm just assuming to fix $5,000
(17:34):
per year being saved for yourretirement from age 22 until 65.
Now, on top of that, I'm goingto make the very conservative
assumption that you never get araise ever in your life.
So you make $50,000 today, youmake $50,000 next year, five
years from now, 20 years fromnow, et cetera, et cetera, et
cetera.
So essentially, what I'm sayingis these numbers are going to
be very conservative.
(17:55):
What if you just saved $5,000per year, never increased it
from the age of 22 until the ageof 65?
Well, if you did that that's 43years you would have put in a
total of $215,000.
Your portfolio I'm assumingyou're going to be an owner in
this case.
I'm just going to use a longterm return of the S&P 500 as
(18:16):
the proxy here.
If you grew by 10% per year,your portfolio value would be
$2,962,000.
So almost $3,000,000 in yourportfolio.
Here's why that matters.
I know you're probably notthinking about life as a
65-year-old, yet If you're 22years old, you got a lot more
stuff on your mind than what amI going to be doing when I'm 65.
However, let's look at thealternative.
(18:37):
Let's say you do graduate, youdo get that job paying $50,000
per year, and you say you knowwhat?
I'm not going to start savingfor retirement quite yet.
I'm going to focus on havingfun.
I'm going to focus on savingfor a car, for a home.
I'm just going to spend thatmoney on whatever I spend that
money on.
And you do that for the first,let's say, 13 years out of
college.
So one day you wake up andyou're 35 years old and you
(19:00):
realize I haven't started savingfor retirement.
Okay, I'll get started now.
I still have 30 years to gountil I turn 65.
Well, you might look at thatand say you missed out on 13
years, but no big deal, you'restill saving for the next 30
years.
Well, let's look at whathappens If, at 35 years old, you
now start saving $5,000 peryear over the course of your
(19:24):
working career.
So from 35 to 65, you've putaside $150,000, but the ending
value is only $822,000.
Compared to the previousscenario where you had almost $3
million in your portfoliobecause you started early.
So if you're looking at that,you're now 35 years old.
You're not going to be nearlyon track to have the portfolio
(19:46):
value that you would have had ifyou had started saving at 22.
Now let's add on to that whatdo we have to do to make up for
lost time?
So now you're 35 years old,you've got to kickstart your
investments.
You now see that maybe $5,000per year isn't enough to get you
where you want to go.
So you start to ask yourselfyou say, okay, well, now I need
to save more each year to makeup for lost time.
(20:06):
How much now would I need tosave or invest each year,
assuming it's grown at the samerate of return, to get me to
that $2.96 million that I wouldhave had if I started at age 22?
Well, if you run the numbers,you would need to invest over
$18,000 per year from the age of35 until the age of 65 to make
(20:27):
up the same amount of money thatyou would have had if you had
simply invested $5,000 per yearstarting at age 22.
Now I'm using a somewhatsimplistic example here.
Everyone has their own uniquecircumstances and can save a
certain amount depending onwhat's going on.
But what that's showing is, bystarting saving for retirement
early, it's not just benefitingyou at 65 and 70 and 75, which
(20:50):
is hard for someone just out ofcollege to even wrap their minds
around.
It's benefiting you in your 30s.
Think about this Now, in your30s.
In this specific example, youdon't have to save $18,000 per
year to be on track for yourretirement needs.
You can just save, quote,unquote, just save $5,000 per
year, which means that extra$13,000 that you otherwise would
(21:12):
have had to save to get to thesame ending value.
That's money that can be usedto pay a mortgage.
That's money that can be usedto start saving for kids college
.
That's money that can be usedto go on more trips.
That's money that can be usedfor whatever you want.
So by starting early, it's notjust because we're so myopically
focused on our long-term goals.
It's also because we want togive ourselves some breathing
(21:33):
room in our 30s and 40s and 50s,to not have so much pressure to
have to really turn our savingsinto overdrive to catch up to
where we otherwise would havebeen.
So that's how I like to framethe importance of saving early,
not just to prepare forretirement, but also to prepare
for all the other goals that aregoing to come along over the
course of our lives and ourcareers.
Now the next and kind of finalpiece of the big rock decisions
(21:56):
that I would say is where areyou investing that money?
If you put all this money sothat $5,000 per year that we're
talking about and if we again goback to the example $5,000 per
year into some type of aninvestment, for 43 years,
growing at 10% per year, youhave almost $3 million in your
portfolio.
Well, let's assume that all ofthat money is inside of a
(22:18):
traditional 401k.
You put $5,000 in every singleyear, you get the tax break and
then, when you get to retirementage, you have $3 million.
But that's all pre-tax Meaning.
When you start pulling moneyout of that portfolio in
retirement, you owe taxes on theentire amount.
Well, think how cool it wouldbe if that almost $3 million was
(22:40):
completely tax-free.
That's what a Roth IRA can dofor you.
So when you're just gettingstarted with investing, it's not
just how am I going to investand what's the right type of
investment to use, it's alsowhere am I going to invest.
So is it a 401k, is it a RothIRA?
Is it a brokerage account?
There's a lot of details andnuance to this, but, generally
(23:01):
speaking, the younger you are,the lower the tax bracket you're
in, the lower the tax bracketyou're in, the more it's going
to make sense to use a Roth IRAas opposed to a traditional IRA
or traditional 401k.
So if you can not only thinkabout investing the right way
but doing it in the rightaccount, that's a powerful thing
(23:21):
that can save you tens orhundreds of thousands of dollars
in taxes over the rest of yourlife just by making that simple
decision when you first getstarted with investing.
So here's the general thing Iwould typically recommend to
people.
If you have a 401k at work andthat 401k is going to give you
any type of a match, take it.
If, for example, you can put 3%into a 401k and your company
(23:43):
will match you 3%, that's theequivalent to getting a 100%
rate of return on yourinvestment the day that you make
it.
You're not going to get thatreturn anywhere else in the
stock market.
That being said, once you'vetaken advantage of that match,
try to see if there's a Rothoption available to you.
This is more nuanced and thishas tax considerations, and so
ideally, you're talking to afinancial professional or at
(24:05):
least doing some research to seewhat makes the most sense for
you.
But as much as you can do intoa Roth.
Your future self will thank you.
It will minimize the taxes thatyou'll have when you start to
withdraw this money in thefuture.
On top of that, more and more401ks are now offering a Roth
feature, where you can do a Roth401k as well as a traditional
401k.
(24:25):
Other episodes talk more aboutthis, but you're going to have a
separate contribution limit foryour Roth and traditional 401k
than you will for a Roth IRA ortraditional IRA.
But in general, get startedearly, decide whether you're
going to be an owner or a lenderand put that money or invest
that money in the best type ofan account that's going to save
you as much in taxes as possibleover time.
(24:46):
That's the best place to start.
What that starts to do is casta vision for your children of
wow, what is possible if I justget started investing now Not
only possible for future benefitby 40 plus years out, but also
possible 10 years out, 20 yearsout, when I'll have more cash
flow freed up to do other thingsbecause I don't have to play
(25:07):
catch up as much with myretirement.
Now, that's just the beginning.
On top of that, you want tohelp to understand how much cash
should I have for emergency?
How much cash should I have forfuture things I'm going to be
purchasing?
How do I protect myself withdifferent types of insurance?
Should I pay off student loansversus invest?
All those are very importantquestions, but I would say they
fall under the umbrella of justunderstanding and having that
(25:30):
vision for what's possible whenyou invest correctly and then
working backwards into the rightportfolio for you.
So, tim, I hope that is helpful.
I think that, as we're teachingour children about investing,
it's one of the most powerfulthings that we can do because,
again bringing this back fullcircle, if you're planning for
your retirement and you mightpotentially have any type of an
inheritance that you leave toyour children, this could be a
(25:51):
home, this could be a portfolio,it could be anything that you
have.
You want to know that that'sgoing to be managed well and be
a benefit to your child, asopposed to being something that
might cause a lot of chaos andoverwhelm and poor decisions
being made because they don'thave the money management skills
that you have.
So I hope that's helpful.
Tim, thank you for yourquestion.
Thank you everyone, as always,for tuning in and I'll see you
(26:12):
all next time.
Thank you for listening toanother episode of the Ready for
Retirement podcast.
If you want to see how RootFinancial can help you implement
the techniques I discussed inthis podcast, then go to
rootfinancialpartnerscom andclick Start here, where you can
schedule a call to one of ouradvisors.
We work with clients all overthe country and we love the
opportunity to speak with youabout your goals and how we
(26:34):
might be able to help.
And please remember nothing wediscuss in this podcast is
intended to serve as advice.
You should always consult afinancial, legal or tax
professional who's familiar withyour unique circumstances
before making any financialdecisions.
In my job as a financial advisor, I am talking
to a lot of people who arepreparing to retire soon, and
one of the things that I, ofcourse, am asking them is what
are your goals for retirement?
What do you want this to looklike Now?
Not always, but frequently.
People will often say thatleaving some money to their kids
one day is important to them.
That's one of their goals.
Depending on your personalphilosophy, this can be a great
thing to do, but as we getdeeper into that conversation,
(00:22):
I'll then ask them I'll say whatwould happen if their kids
inherited all of their moneytoday.
Would that help them or wouldthat hurt them?
A lot of people will thinkabout it and they'll admit that,
while they have incrediblechildren, they're not sure if
their maturity or moneymanagement skills are yet to a
place where they'd be okay toinherit this money.
So they'll realize thatfinancially supporting their
children is great if done theright way, but only if they have
(00:44):
healthy money management skills.
So leaving a financial legacyto your children is more than
just leaving an inheritance orhelping with a home purchase or
even just an outright financialgift.
The best financial gift you canleave your children is an
understanding of how to wiselymanage money.
So in today's episode, readyfor Retirement, we'll walk
through a framework of how youcan think about doing that to
(01:05):
ensure that your legacy goalsinclude more than just leaving a
chunk of money to your kidswhen you're gone.
This is another episode of Readyfor Retirement.
I'm your host, james Cannell,and I'm here to teach you how to
get the most out of life withyour money.
And now on to the episode.
Today's episode was prompted bya listener question, and this
(01:26):
listener question comes from Tim.
Tim says the following Hi,james, I've enjoyed listening to
your podcast.
They are very helpful.
However, this question isgeared towards my daughter, who
will be graduating from collegein December.
She has offers, so she'll bejumping into the workforce right
away.
Very broad question what wouldthe recommendation slash
retirement strategy be for a 22year old just getting started?
Thank you very much, tim.
(01:48):
Well, tim, thank you for thatquestion.
A lot of times we are so focusedon our own planning, which is
obviously good we want to makesure that we're in a position to
have a financially secureretirement, to be able to do the
things we want to do, tominimize taxes, to protect our
legacy all these various things,and then we start to realize
we've learned what we've learnedover the course of maybe years
and decades and, as our childrenare getting started, how can we
(02:10):
get them a leg up in terms ofunderstanding of what to do or
how to prepare for certainthings?
And this is something Iactually really enjoy talking
about, because once you knowwhat to do and you're starting
early, there's no limit to whatyou can create for yourself in
terms of the future you'retrying to build.
So, tim, thank you for thequestion, and this is exactly
what we'll be talking abouttoday.
(02:30):
There's a few things that Ithink are important to cover.
Now, when you're talking aboutfinancial strategy, what should
you be doing?
That very quickly becomes abroad question, with a hundred
different things you could talkabout.
What I like to do is I like tostart with the fundamentals of
how can you cast a vision forwhat your future could be like
if you begin doing the rightthings today, and how do you
(02:52):
focus on those big rocks the bigrocks being the things that are
going to pretty significantlymove the needle and then, once
you have those big rocks inplace, then fill it in and
supplement it with other details.
So, of course, we can't covereverything that I would tell a
22 year old just getting started, but we can cover the main
things that would be mostimportant in terms of casting
vision for what's possible andthen come on up with a game plan
(03:13):
for how to start working inthat direction.
And the other thing that I'lladd to that is, while these
things we're going to talk aboutyes, maybe this is geared
towards someone just gettingstarted, but the reality is
these are the foundations.
This is the truth that all ofour planning and investing in
strategies based upon, and sosometimes even for those of us
who've been doing this forseveral years and decades, even
(03:33):
this is a good refresher.
This is a good chance torecenter on why are we doing
what we're doing, because thathelps us even in our own
planning.
Here's where I'd start withsomeone getting started with
investing.
There's the question of what doI do with my money?
Now, assuming you're not goingto keep it in cash and maybe in
a bit we can talk about how muchcash is appropriate to keep but
(03:54):
you want to invest it, and whenyou're investing, get, what
you're doing is you're, ofcourse, putting your money into
things that you are expecting togrow for you.
Now, there are a whole bunch ofdifferent types of investments
that you can choose from, but ingeneral, the big question is do
I want to be an owner or do Iwant to be a lender?
What does that mean?
Well, if you own something soif you own a stock, for example,
(04:16):
you own that company.
So if you go out and buy stockin Apple, in Nike, in Johnson
Johnson, in McDonald's, inNordstrom, whatever you want to
buy it in, you are a literalowner of that company.
Now, it's you and millions ofother people.
So it's not as if you're makingmanagement decisions or
executive decisions, but yourvalue of your investment is
(04:39):
based upon the value of thecompany.
The company does better, you dobetter.
If the company does worse, youdo worse.
So you are literally an owner ofthat company, and I think it's
really important to remindourselves of that when we buy
stocks.
So often we're looking at whatthe Dow Jones is doing or what
the S&P 500 is doing or what theNasdaq's doing, and maybe you
see a big computer screen withall these flashing red and green
(05:01):
symbols, and it seems not thatfar off from walking through a
casino in Las Vegas and allthese flashing lights.
It's these things going up anddown in value, and it seems like
it's disconnected from realitysometimes.
Well, keep in mind when you arebuying a stock, you are
literally owning a company, andif you're buying several stocks,
you're literally owning severaldifferent companies.
(05:23):
I'm going to come back to thislater.
So that's option one is you arebeing an owner, versus.
Option number two is being alender.
So maybe you don't want to owncompanies, maybe, instead, you
want to lend money to companies.
Well, that's what a bond is.
If you purchase a bond and abond could be anything from
buying a US Treasury bill tobuying a bond in a big US
(05:44):
corporation or internationalcorporation what you're doing
when you're buying that bond isyou are lending your money to
that government or to thatcorporation.
Now, you're doing that because,in exchange for the privilege
of borrowing your money, thatgovernment or corporation is
going to pay you interest onyour money and at the end of the
maturity of the bond this couldbe after six months, this could
(06:05):
be after 10 years At the end ofthat maturity, whatever it
might be they're going to payyou back your money.
So if I buy a bond for $1,000and it's a 10-year bond and that
bond is paying, say, 5%interest.
I can expect $50 per year ininterest, assuming this
government or company stayssolvent, and at the end of the
10 years I can expect my $1,000back.
(06:26):
So that's me being a lender.
So the first decision you wantto make is are you going to be
an owner owning various types ofstocks, or are you going to be
a lender lending your money tovarious companies or governments
?
Now, there's huge implicationsfor what you're going to choose,
and here's why I want to startwith this Long term.
When you look at the performanceof the S&P 500, and, by the way
(06:48):
, the S&P 500, for those of youjust getting started or teaching
your children who are justgetting started, it's just an
index that tracks about 500 ofthe largest companies here in
the United States.
So if you want to say, how isthe market doing?
Well, there's thousands andthousands and thousands of
actual indices or quote unquotemarkets that you could invest in
.
So there's not one singularmarket.
(07:08):
All you have is a whole bunchof different publicly traded
stocks that you can invest yourmoney into.
So you have these groups likethe Dow Jones or like the
Standard and Pours, where theywill create an index, and the
Standard and Pours 500 or S&P500 is one of those indices.
If you track the performance ofthat going back several decades
, it's averaged about 10% peryear growth.
(07:30):
Now there's no guarantee thatit's going to continue growing
by that much going forward, butthat's at least something that
we can use as a baseline.
So in that decision, do I wantto be an owner or do I want to
be a lender?
Let's roughly use that 10%number as a proxy for what you
could have expected, at leasthistorically, for being an owner
, assuming you purchased largecompanies in the S&P 500.
(07:51):
Now compare that to being alender.
So if you're a lender, you'rebuying bonds historically over
that same period of time,depending on what bond index
you're looking at.
But if we just look at a kindof a broad bond index, you can
maybe expect to grow by about 6%per year growth.
Now, when you're looking atthat, to be very clear, you're
not getting 10% every singleyear by owning stocks, nor are
(08:12):
you getting 6% every single yearfor owning bonds.
That's an average return, butyou have a wide variation in the
terms of the actual returnsthat you're accepting, year by
year, more on that later.
Now, as a beginner, you look atthat and you might say that
doesn't seem like such a bigdifference growing at 10% versus
growing at 6%.
(08:32):
Well, it might not seem like awhole lot, but let's take a look
at the numbers.
Let's assume someone's gettingstarted and they're investing
$5,000 per year for 40 years.
One person decides to investthat money into something that
grows at 10% per year and theother individual decides to
invest that 5,000 per year intosomething that's growing at 6%
per year on average.
Well, after 40 years, both ofthese individuals they have put
(08:56):
the same exact number of dollarsinto their portfolio.
They both invested a total of$200,000.
But let's take a look at whattheir portfolios were worth at
the end of that time period.
The individual that invested andgrew at 6% per year.
So by proxy, let's say, thisperson fully invested in bonds
their money grew to about$774,000.
(09:16):
So of that, $200,000 wascontributions.
The remaining $573,000 wasgrowth on their money.
If we compare that to theindividual who instead invested
their money in stocks so theychose to be an owner instead
their money grew to over$2,200,000.
So of that, $200,000 was whatthey put in and over $2 million
(09:39):
was just growth on their money.
So you can see how extremethose differences are.
They have almost three times asmuch money at the end of the
day simply because they chose tobe an owner as opposed to a
lender.
Again, there's no guarantee thathappens going forward, but if
we're using history as our guide, or if we're trying to
understand the relationshipbetween owning stocks versus
(10:00):
lending your money to variousinstitutions or governments,
there's going to be a differencein terms of the return that you
can expect at the end.
Now you do need to educatepeople getting started that when
you're getting that return,it's not happening like
clockwork.
You're not getting 10% everysingle year.
You're not getting 6% everysingle year.
In fact, the S&P 500, let'saverage 10% per year
(10:22):
historically has never oncereturned exactly 10%.
So expect a wide range ofpotential outcomes.
You could be up 50% in a year.
You could potentially be down50% in a year.
That's the price of admission.
That's why you get a greatreturn over time is you're
accepting that short-termuncertainty of you have no idea
(10:43):
what that market is going to door what those investments are
going to do in the short term.
However, to me, that's thefoundation of when you're
teaching people who are justgetting started to invest
understanding the long-termdifferences between what you
choose to invest in.
Now I haven't even talkedspecifics yet of how much large
companies or small companies orinternational etc.
But just using that is a goodfoundation to see their
(11:06):
significant differences betweenwhat you can expect your
portfolio to do for you basedupon what you're selecting as
your investment and the reason.
I emphasize that so much is.
As humans, we have a tendency toinvest in what we know.
Here's a perfect example.
I remember taking a class incollege and in this class were a
lot of young people, verybright people In fact this was
(11:27):
at my MBA program so people thathad some experience, who
weren't brand new to thisinvesting thing.
And I had a class in fixedincome, so bonds, and in this
semester we spent the entiresemester understanding how bonds
work, how they're valued, whatyou can expect from them, and at
the end of the semester theteacher went around the room and
asked how much, based on whatyou've learned in the semester,
(11:48):
would you personally allocateyour portfolio to bonds?
And I remember thinking this iskind of an absurd question just
because we know a lot aboutsomething doesn't mean that it
makes sense for us personally toallocate to, and I was
expecting most people to say Iwouldn't allocate hardly
anything to bonds in myportfolio, given that all of us
were relatively young.
Here's the thing, though.
I said no, I wouldn't allocatea single dollar to bonds, but
(12:10):
most people I don't thinkthere's a single other person in
the entire class that said theywouldn't put any money into
bonds of their own personalportfolio, and, in fact, the
average person was saying theywould allocate anywhere between
20% and 100% of their portfolioto bonds.
And it struck me why on earthwould people who are so young
and have so much time until theyactually need these dollars do
(12:33):
anything with bonds?
And the answer was because theyhad just learned about them.
Now they felt really familiarwith them, they understood the
intricacies of them, and itshowed me a very important
lesson, which is we tend to putour money in things we
understand, regardless of howappropriate that specific
investment happens to be for ourunique goals.
(12:55):
So, as you're understanding this, as you're understanding the
various options, don't just putmoney in things you understand.
I don't care how well youunderstand real estate or bonds,
or stocks or alternatives oranything.
Understanding is just one partof it.
What you really want to know iswhat's the best one of these
investments to help me reach mylong-term goals, and that comes
(13:15):
from understanding whatpotential return you might
receive from each of theseinvestments and then calculating
that out, projecting that outto see what will this do for me
and is this the best thing forwhat I'm trying to do.
So be an owner versus be alender.
That's the most important thingyou can do.
To start is understand whatyou're going to be, and,
generally speaking, the youngeryou are, the better off you're
(13:35):
going to be owning stocks asopposed to owning bonds.
But again, that's always apersonal preference.
Hey everyone, it's me again forthe Disclaimer.
Please be smart about this.
Before doing anything, pleasebe sure to consult with your tax
planner or financial planner.
Nothing in this podcast shouldbe construed as investment, tax,
legal or other financial advice.
It is for informationalpurposes only.
(13:56):
The next thing I would talk toif someone's just getting
started with investing ishelping them understand the
importance of diversification.
Diversification sounds like oneof those things that you do if
you want to be boring and if youwant to underperform the market
.
That's the general thinkingabout diversification and I push
back against that whenever Ican, because diversification is
done to maximize your odds forpotential success.
(14:19):
And I say that because if youlook at the market over the last
50 plus years, on average, twoout of every three stocks in the
market and by market I'mdefining it in this case as the
Wilshire 3000, so 3,000 stocksin the United States two out of
every three of themunderperformed the market.
Yes, how on earth can that be?
(14:41):
How can the average stockunderperform the stock market as
a whole?
Isn't the average stock?
It's gonna be 50-50, halfoutperformed, half
underperformed.
No, and the reason for this isthe companies that do outperform
.
They tend to be what's drivingthe performance of the market as
a whole.
So if you miss out on those topperformers because you're
trying to pick maybe one or twoor three stocks to be the
(15:02):
entirety of your portfolio, youhave a pretty significant chance
of underperforming the market.
So when I'm talking about theS&P 500, that's saying don't put
all your money in one stock Ifyou simply own one index.
Now, all of a sudden, you'reowning 500 plus stocks and
there's actually 505 companiesin that index.
Don't even stop there.
Do you put some money insmaller companies or
(15:23):
international companies, andwhat you're doing is you are
both removing some of the riskfrom your portfolio, but you're
also increasing your returnpotential.
By not just owning one thing ortwo things or three things.
You're increasing your odds ofsuccess over time, which is so
important to do as a youngperson getting started.
The next thing I would then talkabout is the importance of
(15:44):
starting early.
We just went through thatexample where we said what would
happen if, for 40 years, youinvested $5,000 per year and
grew at 10% per year.
You saw that money turned intoa lot more money.
That took the portfolio valueto over $2.2 million after 40
years of doing that.
But the pushback and thisrightfully so, maybe from
younger people getting startedis why on earth would I be
(16:05):
thinking about retirement?
You know, I maybe have studentloans to pay off.
I just graduated.
I want to have some fun, I wantto be able to save for a home,
I need to purchase a car, I needto have some money to live on
All valid points.
But here's where I like to showpeople when you're saving money
for retirement, it's not justfor your 60 yourself, for 65
year old self or 70 year oldself.
It's also for your 30-year-oldself, your 40-year-old self,
(16:29):
something that seems a lotcloser, a lot more tangible.
People say well, what do youmean by that?
When I'm putting money into a401k or Roth IRA or whatever it
is, isn't that money forretirement?
Yes, that money is forretirement.
But here's what I mean.
Let's take a look at example.
So, tim, you mentioned thatyour daughter.
She's 22 years old and she'sgetting started.
I don't know how long she wantsto work when she wants to
(16:50):
retire.
I guess she probably doesn'teven yet at this point.
Most people getting out ofcollege have no idea the day
that they actually want toretire.
But let's walk through anactual example here, tim.
What if you walked your daughterthrough this and said look,
let's just assume for a secondthat you're going to work until
65, just to use that as astarting point and I'm going to
make the assumption that you getout of college and you are
(17:12):
earning $50,000 per year, justto use a nice round number and
I'm going to assume that you'resaving 10% of your salary for
retirement.
Now, I don't care if this comesfrom your contributions or an
employer's contribution.
You know, for example, maybeyou're putting 7% into a 401k
and an employer's matching 3%.
However, you get to that 10%I'm just assuming to fix $5,000
(17:34):
per year being saved for yourretirement from age 22 until 65.
Now, on top of that, I'm goingto make the very conservative
assumption that you never get araise ever in your life.
So you make $50,000 today, youmake $50,000 next year, five
years from now, 20 years fromnow, et cetera, et cetera, et
cetera.
So essentially, what I'm sayingis these numbers are going to
be very conservative.
(17:55):
What if you just saved $5,000per year, never increased it
from the age of 22 until the ageof 65?
Well, if you did that that's 43years you would have put in a
total of $215,000.
Your portfolio I'm assumingyou're going to be an owner in
this case.
I'm just going to use a longterm return of the S&P 500 as
(18:16):
the proxy here.
If you grew by 10% per year,your portfolio value would be
$2,962,000.
So almost $3,000,000 in yourportfolio.
Here's why that matters.
I know you're probably notthinking about life as a
65-year-old, yet If you're 22years old, you got a lot more
stuff on your mind than what amI going to be doing when I'm 65.
However, let's look at thealternative.
(18:37):
Let's say you do graduate, youdo get that job paying $50,000
per year, and you say you knowwhat?
I'm not going to start savingfor retirement quite yet.
I'm going to focus on havingfun.
I'm going to focus on savingfor a car, for a home.
I'm just going to spend thatmoney on whatever I spend that
money on.
And you do that for the first,let's say, 13 years out of
college.
So one day you wake up andyou're 35 years old and you
(19:00):
realize I haven't started savingfor retirement.
Okay, I'll get started now.
I still have 30 years to gountil I turn 65.
Well, you might look at thatand say you missed out on 13
years, but no big deal, you'restill saving for the next 30
years.
Well, let's look at whathappens If, at 35 years old, you
now start saving $5,000 peryear over the course of your
(19:24):
working career.
So from 35 to 65, you've putaside $150,000, but the ending
value is only $822,000.
Compared to the previousscenario where you had almost $3
million in your portfoliobecause you started early.
So if you're looking at that,you're now 35 years old.
You're not going to be nearlyon track to have the portfolio
(19:46):
value that you would have had ifyou had started saving at 22.
Now let's add on to that whatdo we have to do to make up for
lost time?
So now you're 35 years old,you've got to kickstart your
investments.
You now see that maybe $5,000per year isn't enough to get you
where you want to go.
So you start to ask yourselfyou say, okay, well, now I need
to save more each year to makeup for lost time.
(20:06):
How much now would I need tosave or invest each year,
assuming it's grown at the samerate of return, to get me to
that $2.96 million that I wouldhave had if I started at age 22?
Well, if you run the numbers,you would need to invest over
$18,000 per year from the age of35 until the age of 65 to make
(20:27):
up the same amount of money thatyou would have had if you had
simply invested $5,000 per yearstarting at age 22.
Now I'm using a somewhatsimplistic example here.
Everyone has their own uniquecircumstances and can save a
certain amount depending onwhat's going on.
But what that's showing is, bystarting saving for retirement
early, it's not just benefitingyou at 65 and 70 and 75, which
(20:50):
is hard for someone just out ofcollege to even wrap their minds
around.
It's benefiting you in your 30s.
Think about this Now, in your30s.
In this specific example, youdon't have to save $18,000 per
year to be on track for yourretirement needs.
You can just save, quote,unquote, just save $5,000 per
year, which means that extra$13,000 that you otherwise would
(21:12):
have had to save to get to thesame ending value.
That's money that can be usedto pay a mortgage.
That's money that can be usedto start saving for kids college
.
That's money that can be usedto go on more trips.
That's money that can be usedfor whatever you want.
So by starting early, it's notjust because we're so myopically
focused on our long-term goals.
It's also because we want togive ourselves some breathing
(21:33):
room in our 30s and 40s and 50s,to not have so much pressure to
have to really turn our savingsinto overdrive to catch up to
where we otherwise would havebeen.
So that's how I like to framethe importance of saving early,
not just to prepare forretirement, but also to prepare
for all the other goals that aregoing to come along over the
course of our lives and ourcareers.
Now the next and kind of finalpiece of the big rock decisions
(21:56):
that I would say is where areyou investing that money?
If you put all this money sothat $5,000 per year that we're
talking about and if we again goback to the example $5,000 per
year into some type of aninvestment, for 43 years,
growing at 10% per year, youhave almost $3 million in your
portfolio.
Well, let's assume that all ofthat money is inside of a
(22:18):
traditional 401k.
You put $5,000 in every singleyear, you get the tax break and
then, when you get to retirementage, you have $3 million.
But that's all pre-tax Meaning.
When you start pulling moneyout of that portfolio in
retirement, you owe taxes on theentire amount.
Well, think how cool it wouldbe if that almost $3 million was
(22:40):
completely tax-free.
That's what a Roth IRA can dofor you.
So when you're just gettingstarted with investing, it's not
just how am I going to investand what's the right type of
investment to use, it's alsowhere am I going to invest.
So is it a 401k, is it a RothIRA?
Is it a brokerage account?
There's a lot of details andnuance to this, but, generally
(23:01):
speaking, the younger you are,the lower the tax bracket you're
in, the lower the tax bracketyou're in, the more it's going
to make sense to use a Roth IRAas opposed to a traditional IRA
or traditional 401k.
So if you can not only thinkabout investing the right way
but doing it in the rightaccount, that's a powerful thing
(23:21):
that can save you tens orhundreds of thousands of dollars
in taxes over the rest of yourlife just by making that simple
decision when you first getstarted with investing.
So here's the general thing Iwould typically recommend to
people.
If you have a 401k at work andthat 401k is going to give you
any type of a match, take it.
If, for example, you can put 3%into a 401k and your company
(23:43):
will match you 3%, that's theequivalent to getting a 100%
rate of return on yourinvestment the day that you make
it.
You're not going to get thatreturn anywhere else in the
stock market.
That being said, once you'vetaken advantage of that match,
try to see if there's a Rothoption available to you.
This is more nuanced and thishas tax considerations, and so
ideally, you're talking to afinancial professional or at
(24:05):
least doing some research to seewhat makes the most sense for
you.
But as much as you can do intoa Roth.
Your future self will thank you.
It will minimize the taxes thatyou'll have when you start to
withdraw this money in thefuture.
On top of that, more and more401ks are now offering a Roth
feature, where you can do a Roth401k as well as a traditional
401k.
(24:25):
Other episodes talk more aboutthis, but you're going to have a
separate contribution limit foryour Roth and traditional 401k
than you will for a Roth IRA ortraditional IRA.
But in general, get startedearly, decide whether you're
going to be an owner or a lenderand put that money or invest
that money in the best type ofan account that's going to save
you as much in taxes as possibleover time.
(24:46):
That's the best place to start.
What that starts to do is casta vision for your children of
wow, what is possible if I justget started investing now Not
only possible for future benefitby 40 plus years out, but also
possible 10 years out, 20 yearsout, when I'll have more cash
flow freed up to do other thingsbecause I don't have to play
(25:07):
catch up as much with myretirement.
Now, that's just the beginning.
On top of that, you want tohelp to understand how much cash
should I have for emergency?
How much cash should I have forfuture things I'm going to be
purchasing?
How do I protect myself withdifferent types of insurance?
Should I pay off student loansversus invest?
All those are very importantquestions, but I would say they
fall under the umbrella of justunderstanding and having that
(25:30):
vision for what's possible whenyou invest correctly and then
working backwards into the rightportfolio for you.
So, tim, I hope that is helpful.
I think that, as we're teachingour children about investing,
it's one of the most powerfulthings that we can do because,
again bringing this back fullcircle, if you're planning for
your retirement and you mightpotentially have any type of an
inheritance that you leave toyour children, this could be a
(25:51):
home, this could be a portfolio,it could be anything that you
have.
You want to know that that'sgoing to be managed well and be
a benefit to your child, asopposed to being something that
might cause a lot of chaos andoverwhelm and poor decisions
being made because they don'thave the money management skills
that you have.
So I hope that's helpful.
Tim, thank you for yourquestion.
Thank you everyone, as always,for tuning in and I'll see you
(26:12):
all next time.
Thank you for listening toanother episode of the Ready for
Retirement podcast.
If you want to see how RootFinancial can help you implement
the techniques I discussed inthis podcast, then go to
rootfinancialpartnerscom andclick Start here, where you can
schedule a call to one of ouradvisors.
We work with clients all overthe country and we love the
opportunity to speak with youabout your goals and how we
(26:34):
might be able to help.
And please remember nothing wediscuss in this podcast is
intended to serve as advice.
You should always consult afinancial, legal or tax
professional who's familiar withyour unique circumstances
before making any financialdecisions.
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