Many people think they need to be a millionaire to hire a financial advisor. Guess what. You don’t necessarily have to!
Few people wake up one morning and think, “Hmm. I should hire a financial advisor.” It’s often a life event—like a new job, marriage, the birth of a child, an inheritance—that propels them to seek advice.
It might feel counterintuitive to think about paying for financial management at this stage of your life but think of it as making a solid investment in your financial future. There’s an old saying “mighty oaks from little acorns grow” which is a perfect analogy here. Why wait to start planning? The sooner you start, the longer your oak has to mature.
Lay the Financial Foundation for Your Future Now
Financial planning is about so much more than simply “investing”. It is about being able to achieve your financial goals, whether it’s buying a house, paying for a college education, setting off on that dream vacation, or retiring in style. The right advisor will help you put together a comprehensive financial plan that takes a look at the big picture over the long term, and includes protecting your assets, and even tax and estate planning. Laying a strong foundation now will allow you to build for years to come. This is especially important for those anticipating a future inheritance.
The Importance of Setting Goals
Today’s younger generation faces different challenges than their parents. Many face high student loan payments, and many have put off buying homes or starting families. A financial advisor can help chart a plan designed to lower and pay off debt while creating savings and other strategies for life’s milestones. Your advisor will provide guidance on balancing debt reduction and investing for the future so you can achieve your financial goals.
Save Early: The Magic of Compounding
Young investors have an advantage over people who wait till they’re close to retirement to work with a financial advisor: time. It’s the perfect ally for building wealth throughout your career.
This Business Insider article shows the benefits to saving sooner:
- A person who saves $300 each month starting at age 25 will have saved $144K over her career and, thanks to compound interest, should have a balance of about $460K when she reaches retirement age at 65 (assuming a 5% annual rate of return)
- A second investor waits to age 35 before saving $300 per month. She saves $108K by retirement but generates just $251K after compounding—only about half as much money as the first investor
- The final investor saves $600 per month but doesn’t start until age 40. She saves $180K for 15 years—more than the first investor. But because her savings had less time to earn interest, she has just $359K when she retires—$101K less than the first investor
Insurance is Not a 4-letter Word
Many people’s eyes glaze over when they hear the word “insurance”, but think of it more as “risk management.” You are working hard to accumulate assets and build a solid financial foundation to ensure a bright future for you and your family and the last thing you want is for some unexpected life event to take that all away. A good financial advisor will make sure you and your assets are protected as your portfolio grows and the earlier you start, the more affordable it is.
Take Advantage of Tax-Advantaged Plans
Tax-advantaged plans refer to financial accounts, investments, or savings plans exempt from taxation, tax-deferred, or offering other tax benefits. These include HSAs, IRAs and 401(k)s, among others. But each plan offers different features. Working with a financial advisor early on in your life will ensure that you take full advantage of potential tax savings that can be reinvested in your financial future.
Start with Trust Advisory Group
Age might be just a number, but the lower the number, the more time you’ve got to build your nest egg and prepare your financial future. You owe it to yourself and your family (or future family) to start your financial planning now, no matter how much you currently have in assets – and the Trust Advisory Group, unlike most financial advisors, has no minimum account size to get started. Learn more about how TAG can help you set and achieve your goals.