by Frederick A. “Rick” Fisher, MS, CFP®
A few years back, my two oldest sons each received good news at the same time. My oldest son, Max, was offered his first salaried position in the entertainment industry, complete with benefits! His younger brother, Noah, graduated from High School and was accepted to one of his top college choices, with a small scholarship. My wife and I are happy and proud.
While my sons have very different personalities, they do have some common traits that have helped them get to where they are today. First, they both have set clear goals they are passionate about achieving. Max’s goal is to work in the entertainment industry, while Noah wants to be a Doctor or Scientist.
Second, they have each planned from an early age what they need to do to work towards their long-term goals. Max has been singing, making films, and playing guitar since he was ten years old. He has taken elective classes in the arts and earned a degree in film. He also worked in unpaid internships in Hollywood to get his foot in the door, which has resulted in his recent salaried position. Noah took advanced science classes and interviewed doctors during his junior high and high school years to prepare for college and medical school.
What’s the Secret to Financial Freedom?
At different times, both of my sons have asked me, “What’s the secret to achieving financial freedom?” My answer has always been simple, “Start saving early and consistently.” Both Max and Noah would like the option of retiring before they’re 65 and want to know what they should do to make it happen. There’s no secret; they must treat this goal like any of their other goals.
How Much Will it Cost?
First, they need to get clear about how much money they will need to save and when they want to retire. From there, they will need to calculate how much money per month or year they need to put aside to reach their goal, with a reasonable return rate.
To help my sons calculate how much they’ll need to save, we did a simple analysis together. If Max achieves an average rate of return of 6%, he will need to save $9,000 per year for the next 36 years to obtain his goal of $1 million savings by age 60.
Where Should I Start?
When Max first heard the numbers, he said, “There is no way I can save that kind of money right now.” We discussed that he should start by saving what he can now, whether it be $50 or $100 per month. As his income increases, he will increase his savings rate and five years from now he may be saving 10% to 15% of his income. Twenty years from now his savings will be well over $9,000 per year.
The key is to start saving early and to make saving for retirement a top priority that gets funded at the cost of other expenses, like dining out, vacations, and hobbies. I also reminded Max that like any goal, he and his brother will need to monitor their plans and make adjustments as needed along the way.
Saving for retirement, early or otherwise, takes patience, commitment, and diversified investments. Working with a trained and competent financial professional is a great place to start. How much will financial freedom cost for you? How much do you need to save each year to get there? To find out whether you’re on track, let’s meet to discuss your plans and how my team may be able to help.
About Rick Fisher
Rick Fisher is a financial consultant offering comprehensive financial planning and investment management with Ostrofe Financial Consultants, Inc. in Grass Valley, California. His goal is to help clients prepare for retirement and pursue their financial dreams in a fun and personal way. Rick serves clients in 15 states, though most reside in California, including the greater Sacramento, Los Angeles and San Diego areas.
Credentials and Experience
Rick holds FINRA Series 7, 63, 65, 24, and 51 licenses and is supported by Ostrofe Financial Consultants and National Planning Corporation. He also holds his California Insurance License and the designation of CERTIFIED FINANCIAL PLANNER™ professional (CFP®). He holds himself to their high standards of integrity, objectivity, professionalism and confidentiality. Please note: NPC does not render tax or legal advice.
How Rick Can Help
Rick strives to take the fear and stress out of financial planning. He works with clients to uncover financial issues they may not have known about or have not yet addressed. Rick and the Ostrofe Financial Consultants team are there to answer questions, guide clients towards their goals, and help them feel confident in their future. To learn more about how Rick may be able to help, call his office at 530-273-4425.