Cash Flow Management Tips for Retirement Savings and Investing
I know how hard you business owners work all year to close sales and make enough to pay the bills to keep your business running. The trend I see is that, when cash is short, you cut back on 2 critical expenditures – PAYING YOURSELF an adequate salary and investing in building YOUR RETIREMENT SAVINGS.
Let’s see what regular weekly / monthly retirement savings contributions can do for you in the hands of a good Wealth Advisor.
How much will your retirement savings grow with regular contributions?
and
How do you choose a good Wealth Advisor?
Of course you know that regular savings accounts, money market accounts and CDs (Certificates of Deposit) pay almost no interest, but it is a place to start to build up a small chunk of cash to start investing with a wealth advisor. It isn’t too difficult to find a wealth advisor who will take on small individual accounts.
There’s an easy way to see how much your savings will grow with any number of online interest compounding calculators. Here’s one site that has a free financial library complete with financial calculators for savings and retirement, amortizations and credit card payoffs:
https://www.naplesam.com/namco-library.html
And here is one specifically for savings earnings with compounded interest that is easy to use:
http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
Just as an example look at what a very conservative gain of 5% a year invested with a wealth advisor can do for you. Using the calculator, we’ll start with a initial $10,000 investment and say we’ll contribute an additional $200 a month ($46.15 a week) every month for 20 years.
When we calculate that, you can see that the total deposits of $58,000 over 20 years (starting with the $10K investment) earns $51,675 in compounded interest and yields a retirement account balance of $109,675.
That’s not enough to retire on, but it’s a good example of what compounding interest can do for you.
Now, I can’t tell you WHO to choose as a wealth advisor, BUT I can tell you, in my personal opinion, the most important thing you should know about WHICH ONE YOU CHOOSE is that they should be a Fee-Only FIDUCIARY.
FIDUCIARY STANDARD – A Fee-ONLY Registered Investment Advisor, adhering to a Fiduciary Standard has a LEGAL OBLIGATION to always act in your best interest and actually manage your investment portfolio and only recommend what is in YOUR best interest. They must place their client’s interests ahead of their own. They earn a fee for actually managing your account – they DO NOT ever earn any commissions, fees or income of any sort from the investments they recommend or utilize in your account.
What you DO NOT WANT is someone who operates under what is known as the “Suitability” Standard – that’s like Wall Street Firms, Banks, Insurance Companies and their brokers / advisors because they DO NOT HAVE A LEGAL OBLIGATION to act in your best interest. Suitable is NOT what is best for the client – in other words, a “suitable” operating broker / advisor can put your retirement funds in an expensive, poor performing, inferior annuity or mutual fund if you want long-term growth and the “Suitable” standard has been met, even if your investment loses money. The investment is not the best or the least expensive, it is just “suitable” and they have earned some big commissions on putting you in these poor performing investments and you could lose a lot on the investments too, adding insult to injury.
So research what the difference is between a FIDUCIARY and an investment advisor who operates on “suitability” and always choose a Fiduciary – and don’t take their word for it when you ask the question either. There are ways you can find out if they are really a Fiduciary by knowing the right questions to ask. For example:
“Do you act as a Fiduciary and an independent FEE-ONLY Registered Investment Advisor?” (the right answer is YES)
and,
“Does any member of your firm or Broker-Dealer ever earn any commissions, on-going fees or income of any sort from investments they recommend or utilize in your clients’ accounts?” (The right answer is NO)
and,
“Are their financial incentives for you, your firm, or your Broker-Dealer to recommend certain financial products?” (The right answer is NO)
There are other question to ask, and you can search them out on the internet.
You already know I’m always after you to save and invest for your own future, but I do want you to do it SAFELY too, and with someone who actually has your best interests at heart.
Cash Flow Management Tips for Retirement Savings and Investing
