Simple Modern Wealth
3 Key Money Moves To Make Before Age 45
The “old” way of investing is just that — old.
Your parents handled money differently than you intend to:
• They didn’t need loans to afford college for one thing, while Millenials and Gen Z together hold $616 BILLION in student loan debt.*
• They didn’t have the same resources that you do. Or more specifically, they didn’t have the information overload you have.
• And they didn’t have cool new stuff popping up every other day that could revolutionize the way you invest… or could be a passing fad that cost you everything you’ve saved.
Now that you’re earning money, you need a modern roadmap that fits your busy lifestyle.
Do you have time to wade through everything to figure out the best way to move forward? Putting together a workable strategy seems like just another task to add to your already enormous to-do list. And you feel the urgency because time’s speeding by.
Money management may seem pretty complicated, and you’re concerned about all the financial info you never learned in school. What you’re looking for is a minimalist approach. A roadmap that takes into account everything you need to know but doesn’t overload you with a lot of information or complexity.
And one that combines the best of the past with the opportunities your parents didn’t have.
The good news is, you can discover a modern strategy that’s tailored to your own circumstances. You don’t need to go down the Internet rabbit hole, or hand over control if you don’t want to.
This simple guide is designed for people under the age of 45, who know they need a strategy and want a simple approach to building their wealth that doesn’t leave out the best opportunities of today.
You may have found yourself asking questions like these:
What’s the best way to manage paying off debt and saving for my goals?
How can I approach my financial future without depriving myself today?
What can I use from earlier generations' strategies that helped them build their wealth?
How can I best use technology when it comes to my money?
Are the new trends I’m hearing about worth investing in, and how can I tell?
Is there someone with experience who can help guide me through my planning without taking over?
If any of those resonate with you, keep reading…
Modern Money Key #1
What’s most important at your life stage?
As your income grows and your life progresses, you’ll discover that new challenges mean that you may need to plan for your finances differently. The stages aren’t the same for everyone, and different people go through them at different ages. However, you still need to be prepared for whatever life throws at you.
Maybe you’ve bought a house or are thinking about it. On the other hand, you might have decided against real estate ownership. It’s important to balance paying off your debt, living your life, and saving for your financial future!
Even though retirement feels so far away, you recognize you’ve got to save. But you’re not sure if Social Security will be there for you. And you probably won’t have a pension to rely on.
But what does retirement even look like in the 21st century? Thinking about FIRE — Financial Independence, Retire Early? You’re pretty sure you won’t be sitting in a rocking chair at age 65 like previous generations, and you might be planning to work until age 70 or beyond.
But what happens if your health doesn’t allow you to do that? A little over one-third of retirees have to retire earlier than they expected, often due to illness or health issues.* Your strategy has to be agile enough to allow you to make detours when necessary, yet keep you on track to get you to your financial destination.
Achieving your financial goals are within reach, but you won’t get there by accident: you need a roadmap. Instead of using the same old atlas that your parents did, you can use modern tools that are at your fingertips.
Critical questions to ask include:
What are my financial goals, and what is my strategy to secure them?
Do I have clarity regarding the next steps that I need to take in order to achieve the financial future I want for myself and my family?
How do I create a map that’s flexible enough so that when life gets in the way, I can adapt?
Are there financial coaches who have both the experience in mapping out strategies for financial goals and the technical flexibility that I need to guide me down this path?
Modern Money Key #2
Is your impact and wealth working together?
You think about the impact of your investing significantly more than the previous generations: on the planet as a whole, on the climate, on underserved populations. You’d rather go after your financial goals without destroying the planet or ending up with other negative outcomes.
While you know that planning and saving is critical, you’re hoping to be able to do that while having a positive impact on the world. Maybe you want to avoid investing in companies that contribute to climate change and global warming. Maybe you’d prefer to put your money to work with companies that treat their employees well and understand the importance of diversity and inclusion, not only in their workforce, but also in their leadership.
Fortunately, this is absolutely possible. Research shows that investments prioritizing sustainability, good governance, and/or the environment do no worse than traditionally managed ones.* Some may even outperform. There’s a variety of what are called ESG (environmental, social, governance) or SRI (socially responsible investing) funds and money managers available to you.
You can have a portfolio that allows your money to make an impact somewhere in the world. While the good news is that there are plenty of choices, the bad news is that there are plenty of choices. Investors often find it overwhelming to sort through all the options to find the ones that are just right for them, but it is possible.
Critical questions to ask include:
What companies am I currently investing in, and would I prefer to avoid certain ones?
Do I dread opening up social media to find that my investments are having a negative impact on the world?
Am I investigating my investments to ensure that I’m not contributing to the planet’s problems through my savings?
Are there financial coaches who understands the ESG/SRI universe and can help me narrow down my options?
Modern Money Key #3
Is the latest “Cool New Thing” a fad or an opportunity?
It’s hard to know whether a specific trend or new idea is going to stick around, and that’s why plenty of people get it wrong! You can look back on quotes from the previous generation who proclaimed in the 1990s that the Internet was a passing fad. Or that this e-commerce stuff (known back then as “dot-coms”) would soon fade away.
On the other hand, there have always been people who look at what’s going on from an objective point of view.
They understood that investors needed to be thoughtful about where they decided to put their money. The underlying technology was a driver for a new way of interacting with others, but that didn’t mean that everything sitting on top of the tech was worthwhile.
Novelty is important to human brains and it’s easy to get caught up in the latest fad or bubble because of that. Yet having experience in an industry can be just as important as being open to innovation. Knowledge about what’s previously come and gone, and what’s stuck around, gives investors the objectivity they need when the next Cool New Thing arrives.
As a busy person with a lot on your plate, you can’t afford to waste time (and money) on things that are new and interesting but ultimately not worth much. At the same time, if you invest savvily, you can potentially amass some significant wealth to add to your modern nest egg.
Critical questions to ask include:
How can I figure out whether the Cool New Thing is here to stay?
Am I only responding to the novelty of it, or is there another factor that makes it more likely to stick around?
Is the Cool New Thing worth my time, energy, and money?
Do I know a financial coach who has some experience with fads in finance, but is open to investigating new ideas as well?
Set Your Modern Money Map In Motion While Opportunities Are Ripe
While you’re already aware that you need to start planning for your future, you probably don’t have the kind of wealth that your parents have. Their financial solutions are probably not the right ones for you.
You’ve got more technology available, which is both a blessing and a curse. While some of your life stages might be similar to theirs, the ages at which you reach them could be drastically different. The environment that you grew up in and are now earning money in, is definitely different.
What you need is a modern approach that blends contemporary information with the tried-and-true money management from previous decades. And it’s critical to do so now so that your goals are achievable.
Having too much data can leave you stuck in analysis paralysis, leaving you unable to take the necessary next steps. Some of the information firehose comes from those that campaign for the latest Cool New Thing. Some of it comes from older generations with old-fashioned money management techniques. It’s easy to be overwhelmed, but you need to be smart about the information you’re taking in.
It’s critical for you to have your strategy and implement it before age 45, and the sooner the better. That way you’re prepared when life happens, so you don’t lose your savings to scary life surprises. Not to mention that the sooner your investments can have a positive impact on the world, the brighter the financial future will be.
Fortunately, there’s a 21st century solution available. At Futurvest, our coaches have a wealth of experience and knowledge that helps investors get an objective perspective on what’s worth saving from previous decades, in addition to the innovations from the current landscape that allow for newer options.
You’ve already taken the first smart step in reading through this guide. Take the next one by joining a community that understands what you’re looking for and can help guide you there.
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Sources:
2. Center for Retirement Research
3. SCRIP
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