This week we had our monthly meeting at Halpern Financial. That’s when our Virginia and Maryland teams get together for a mini “State of the Union.” We share research, talk about client needs and updates, and we’ve even started a book club for professional development.
One book this month was The Thin Green Line: The Money Secrets of the Super Wealthy by Paul Sullivan. The whole idea is that being “wealthy” is different than being “rich”—it’s a mindset of using money in ways that will benefit you and your loved ones the most.
That’s what we’re all about here at Halpern Financial—and we think a lot about how people can make that leap from having all the trappings of the rich (fancy car, exotic vacations, etc.) to a state where they are truly at ease about their short-term cash flow and long-term wealth management. That’s the goal.
But how do you get there?
Save more: If you spend less, naturally you have more cash to save. And you really should take advantage of it! Look for any opportunity to increase the amount you save—whether that’s setting up automatic savings to “pay yourself first,” using part of your annual raise for savings, or putting a bonus to work for you in your investment account.
Spend less: Eliminate “mindless” spending and make it more mindful. There’s nothing wrong with treating yourself to Starbucks once in a while—but if it becomes a daily habit, it’s not really a treat any more. Not to mention, a daily Starbucks habit could add up to nearly $2000 a year! Costco and Amazon Prime are big enablers of impulse spending too—Amazon Prime members spend 68% more than non-members each year…it makes you wonder if Prime’s ‘free’ shipping is a better deal for Amazon than it is for you.
Limit taxes: Nerdwallet recently did a study comparing the average total taxes in different cities across the U.S., and coming as no surprise to anyone who lives in our region—Washington, D.C. had some of the highest total average taxes for homeowners. A good tax planner can help you to pay only the amount of taxes you owe, and no more.
Don’t. Just don’t. Don’t drink to excess, don’t gamble to excess, don’t do drugs, don’t cheat, and don’t be greedy. We could go into a lot more detail on that last one, since the desire to get rich quick on the next hot IPO or by timing the market can lead investors into big trouble. The bottom line is that simply avoiding costly problems puts you ahead of those who are selfish or try to game the system. In other words, don’t detonate your own life!
Stack the deck in your favor. There are some risks that are inherent to investing, but there are many things you can control. For example, to minimize the risk of any one investment underperforming, we advocate a diversified approach. And while there is always going to be a cost to access the markets, it can be minimized. The majority of investors pay commissions and buy on retail platforms. We avoid both. Are you sensing a theme here? The more money we can save for you—whether it’s by investing in funds at low institutional costs or rebalancing your investments in a tax-efficient way—the more of your money is available to grow.
Play percentages with life. Prepare for the things you know are likely to happen in your life. Your chances of being struck by lightning? One in a million. Your chance of winning the lottery? One in 176 million. Don’t count on those things happening. But your chance of dying? 100%. So insure your life and your income where voids exist. Establish or update legal documents like wills and estate plans, and make sure beneficiaries are updated so your loved ones are taken care of.
DREAM! Don’t forget—it’s really not about the money! The experiences you dream of and the goals you would like to achieve will pull you through. So dream big, and hold yourself accountable to your own plans.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Halpern Financial, Inc.. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Halpern Financial, Inc. is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Halpern Financial, Inc.’s current written disclosure statement discussing our advisory services and fees is available for review upon request