Jan 6, 2021
Erin L. Weber, CFP®, CPFC®
The flight to financial freedom transports its passengers from realizing they need to do something to actually doing it. The major force they must first overcome is procrastination, simply pushing aside the inevitable until they are ready. My goal is to get them ready.
You don’t want to begin the journey two years away from retirement. It is never too late, but you want time as your friend, not your enemy. Truth is, it is better to think about the flight to financial freedom when you get your first job, your first paycheck or your first career, not late in your career and in the red zone close to retiring.
There Are No Overnight Fixes or Flights
A lot of what I do centers on education and budgeting. These are two main areas of your financial foundation. When you start budgeting you begin gathering your financial information and looking at what’s coming in and what’s going out.
People think, “Well, this is something I can sit down and do overnight.” Not quite. It is a process that takes a few months, like starting your financial plan, not a “quick fix.”
We start by sitting down with you and having a conversation to get to know each other. At Hefren-Tillotson, we see ourselves as financial planners, unlike the myriad of advisors out there who can also invest your money for you. In fact, if you were in a group of 10 people sitting at a table between the ages of 20 to 60, chances are your money and their money would all be invested the same way.
How can anyone invest your money successfully if they don’t know or understand what your goals and objectives are? Financial planners do.
Having a Comfortable Relationship with Your Planner is Very Important
The main thing is to find someone you can work with and also have that all-important first conversation. The discovery conversation is uncomfortable for some people. I know that. After all, money is a scary topic. Growing up, we were told not to talk about it. But the reality is you must try to get comfortable with this professional person to have this conversation.
I realized very quickly as a financial planner that no two people are the same. I don’t mean to be blasé about this but it is true, mainly because we have to be very flexible as to what people want in the conversation. Some want to get very detailed about it, others don’t want that type of conversation; they want bonding and rapport. Regardless, we still have to forge a relationship with them that will last for years and transcend into the next generation.
Clients, too, must have that comfort level with us. If you are not comfortable with that advisor or planner and cannot open up to them, it is not destined to be a successful relationship. It is unlikely you will tell them all the information they need to know. In our business, “Tell me a little about yourself” are six extremely important words. And so is, “Tell me how you got to where you are today.” Much of this is about the psychology of investing. It is a fascinating topic that I have been doing a lot of research on.
Basically, everyone has a different concept of money. An ultra-wealthy person’s concept of money might be about spending freely. A more conservative person spends when they need to. Both have developed their concepts based upon how they grew up, how their careers developed and by their parents’ influence.
How Would You Like Your Investing?
Knowing and understanding your own concept of money is important. Why? It will help determine how you want your money to be invested: conservatively or aggressively.
I have clients who say to me, “Tell me what we need to do and just do it.” The education component of what we do is essential to the process. It’s important for clients to understand the process, which is why we explain things in laymen’s terms, not talking over peoples’ heads. We feel that even if they don’t want to know, they need to know.
We also make sure that everyone who should be at the table is, preferably, husband and wife. After all, we don’t know what tomorrow may bring. If the people involved don’t know what is going on, it can cause problems down the road. My goal is to make them interested.
Some clients come in and say they don’t want to be involved in the process. I’ll say: “This is your life. You have worked so hard for this, and you need to know what’s going on in the process.” They trust us. That’s great because it means we have a good relationship with them. By the same token, however, we feel they still need to understand what’s going on. The more I educate some clients, the more excited they get and want to learn more.
When there is this much going on in the market, they need to know and understand that their accounts can go down too. If we never had a conversation in the pre-work stage about these things, there could eventually be a huge panic. Obviously, the idea is to avoid a panic. No one can mentally predict anything like a pandemic, but we can mentally prepare clients for when situations like this do occur. When things like this do happen, the panic doesn’t exist.
The Journey is Different for Every Person
You might expect everyone on the journey to have the same goals, dreams and expectations in retirement but that is not the case. When I sit with someone in their 20s or 30s, and just starting their career, their flight is going to be very different from someone retiring in six months. There will be different goals. Later on, one person may want to leave all or part of their estate to their children while another one will spend everything down to the last penny.
Our goal is for clients to have that “sleep well” factor at night to take that stress off of them. When roadblocks occur, we find a course around them to stay on track. We also remove the emotional factor. Clients will say, “We know you know what is going on, so just tell us what is going on.” At the Weber Group, we reach out to every client every single quarter. They get their reports, and we get to them before they ever feel they have to reach out to us. After all, we’re in a relationship-building business. When we call clients the conversation often bypasses the finances because they want to share what’s going on in their personal lives. When that happens, we know we are giving them that sleep well factor at night.
We, too, sleep well in knowing our clients are not worried about what is going on in their portfolios. It is our job is to keep them on track. They know they are on a journey and rely on us to keep them airborne for their flight to financial freedom.
DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.