Wealth Building 101 (Part 3)
A Three-Step Formula for Financial Success
“Wealth is largely a result of habit.” —John Jacob Astor
Wealth Building Lesson #10
I’m a big fan of working with financial professionals. Most of us wouldn’t attempt to fill our own cavities or set a broken bone. You’d want someone who had extensive training and experience to handle those things.
How many of us have the time, interest, or knowledge to manage our own finances—and do it well?
The women I interviewed who had the highest net worth didn’t necessarily earn (or inherit) the most money. The whopping majority of these women, however, worked with financial professionals.
If you’re considering hiring one, here are a couple of cautions to be aware of when looking for a trustworthy financial advisor.
Caution 1: Financial professionals make lousy Prince Charmings. Don’t ever hand over your money, close your eyes, turn your back and hope they’ll take good care of you. To find a good advisor, ask for referrals from people who are happy with their advisors. And here are some good online sites to check out:
www.napfa.org — National Association of Personal Financial Advisors
www.garrettplanningnetwork.com —The Garret Planning Network of fee-only financial advisors
www.cfp.net —Certified Financial Planner Board of Standards
Caution 2: Resist the urge to sign up with the first advisor you meet. Interview at least three. Ask questions like these, then go with your gut.
Would you tell me about yourself?
Do you specialize in certain investments?
Can you describe the ideal client you like to work with?
How do you charge for your services, and what costs might I incur working with you?
How often do you communicate with clients; how often will I hear from you
Have you ever been involved in any lawsuits, arbitration, or disciplinary problems?
Is there anything you want me to know about you that I haven’t asked?
I’ve even written a booklet called Finding a Financial Advisor You Can Trust, covering everything you need to know about hiring the right professional for you. You can find it on my website (https://www.barbara-huson.com/resources/)
These past few articles covered a lot of information, and you won’t learn it all in one reading. In fact, I encourage you to save Wealth Building 101—Part 1 and Part 2.
Let’s wrap this Wealth Building 101 series with a Three-Step Formula for Financial Success.
I recommend my clients practice the Discipline of Affluence by following this three-step formula for at least four months. You’ll be amazed at how much more you’ll know after just a few months of doing these consistently. (this is what I did ages ago to cut through the overwhelm and educate myself...something I continue to this day.)
1. Every day, READ... about money, just for a minute or two. I call this the Osmosis School of Learning. Simply peruse the headlines of the business section of the newspaper or read a paragraph in a financial book before bed. So much of getting smart (or smarter) about money is familiarizing yourself with the jargon and the current trends.
Warning: Focus on the facts, not the hype. The media feeds on fear. Bad news sells. Do your best to ignore the drama and just stick to educating yourself.
2. Every week, TALK...about money, especially with someone who knows more than you. Women rarely talk about money, other than lament the high prices or complain about the lack of it. It’s our secrecy and silence that keeps us stuck.
Find a knowledgeable friend, family member, or colleague and tell them you’d like to ask them questions about how they got smart, the biggest mistake they’ve made, the best advice they’ve gotten, etc. You could even form a financial study group or book club with friends.
3. Every month, SAVE...automatically. Simply fill out a form (easy to do online) and your bank will automatically transfer money from your checking account or paycheck into a savings account. You don’t miss what you don’t see. What if you don’t have anything left over at the end of the month? Try dropping your spare change into a jar at the end of each day. You can also start tracking your spending to see where you could make some cuts. Add those savings to your jar and deposit the amount into your savings account each month. Small sums can add up quickly.
There’s always more to learn but this is a good beginning. Learning the basics is like learning to dog-paddle—it will help you stay afloat. You might be a little uncomfortable at first but taking these simple steps will help you get more and more comfortable navigating financial waters.
Before you know it, you’ll be ready to play in the deep end, the fourth and final stage of Sacred Success—Modeling Greatness. We’ll talk about this stage in my next installment.