Jake (44) works in sales for a large national dog food distributor and his wife, Kelsey, (42) works in compliance for a health insurer.
They have three children (11, 10, and 8) and an Australian Shepherd named Zeus.
Both are in fantastic shape. Jake is an avid CrossFit athlete, and Kelsey does high-intensity interval training.
They have household income around $300,000 per year, but feel like they are struggling to keep their head above water…
They’ve tried various forms of budgeting over the past decade of marriage but have struggled to save much of anything outside of their “standard” retirement accounts.
This is common, but why? Why do most people have success saving and investing in their 401k, but struggle filling the other buckets?
- Automation
- Lack of liquidity
- Out of sight, out of mind
- Hard to part with it
Jack and Kelsey are like so many young high-achieving professionals that we work with, and here’s the thing that they needed to be reminded of: You guys clearly have the discipline to build wealth in your employee sponsored retirement accounts (401k), you get to the gym, you eat healthy, you do all of this consistently…
I have 100% confidence that I can help you build wealth and pursue your family’s most important goals.
The discipline required to have success in one area of life can easily be replicated to other areas of life with a game plan.
Our next steps included introducing to this high-achieving family the concept of reverse budgeting. We discussed and prioritized a list of their families most important goals, and we assigned each a time frame in which they wanted to achieve those goals by.
We assigned an amount of money needed to allocate (invest) monthly to fund these goals, and finally, we projected the leftover monthly balance after all the allocations had all been made.
“Nic, what do we do with this (the leftover monthly balance)?”
“Do whatever you want with it.”
I coach our clients all of the time, we’ll fund the goals first and you can then live guilt-free with the rest.
Still have money leftover? I mean I’m a financial advisor, obviously I’d love to see you invest and save even more 😉, but you have your plan in place so go have some fun with it.
So what happened with Jack & Kelsey?
As you might imagine, they took the plan and immediately implemented it. They experienced a few minor bumps over the next couple of months getting used to it, but zoom out a year later they are building wealth outside of (although in addition to) their employee sponsored retirement accounts, they’re consistently funding their goals, and they’re enjoying many more guilt-free family activities.
If you or someone you’re close to is a high-achieving professional that could use help aligning their finances and establishing a financial plan, please reach out to us, we’re accepting new clients and eager to help.
Cheers, Nic
This is a hypothetical situation based on real life examples. Names and circumstances have been changed. The opinions voiced in this material are for general information only and are not intended to provide specific individualized investment, tax or legal advice for any individual. We suggest that you discuss your specific situation with a qualified, legal advisor and financial advisor.