By Gerald Robinson, CFP®
Since I began working in financial services around 25 years ago through my current tenure at LightForce Financial, it’s been personally rewarding to help so many people and families build financial confidence. Although there are many more resources, tools, and financial instruments to work with these days, one of my very first tasks as a financial advisor remains close to my heart.
I met a couple at my church who realized they needed to be more disciplined with their money. They had a reliable income but tended to spend money on things they wanted in the present. The future seemed a long way off, so, like so many couples, they’d never really thought about saving for retirement.
They decided they wanted to start building a nest egg, knowing it would take more frugal spending habits. Their goal was to have at least $1,000,000 for retirement. All they had to start with was $5,000. I could work with that.
7 Strategies We Used to Grow Wealth
We began by forming a financial plan. The first step was creating a workable budget that made them spend less than they made. This allowed them to scale back on discretionary expenses so they could invest more of their money.
From there, we adopted seven strategic approaches to get them to their financial destination.
1. Set Up a Retirement Savings Goal
This is the first step in all financial plans, including retirement funds. My clients had $1 million in mind, so that’s the figure we targeted.
2. Open Retirement Accounts
We launched multiple retirement accounts for investing: a traditional IRA, a Roth IRA, and a joint investment account. Having several financial instruments at our disposal allowed us to optimize and diversify their tax treatments. They were also able to contribute to their IRAs up to each one’s annual maximum (their joint account had no such limits).
3. Pay Down Debt
Our budget allowed the couple to pay off their credit cards and other high-interest debts in a timely manner. This generated more cash flow, especially since interest rates went lower after every payment. It also gave them access to better credit terms, though they maintained discipline about spending.
4. Set Up Auto Deposits
The couple began making automatic, recurring deposits to all their funds straight from their bank. They mirrored the match requirements of a typical 401(k) plan, which is fairly easy to do when using auto deposits.
5. Start a Safety Fund
We then started an emergency fund to deal with unexpected emergencies and large but necessary expenses. An accepted rule of thumb is that your safety fund should cover between three and six months of living expenses, like mortgage, utilities, household staples, insurance premiums, and other debts.
6. Save Additional Income
When the couple earned income besides their normal salaries, they immediately put the proceeds back into their investments. They were able to compound growth and accomplish their financial goals more quickly.
7. Keep Goals Top-of-Mind
All along our journey, my clients and I kept thinking about the future and the positive habits they had developed. Doing so served as a guiding light toward financial responsibility and a happy retirement.
We met frequently over the first couple of years of our collaboration. As they grew more comfortable with their savings strategy, we moved to an annual check-in. When they were close to retirement age, we made a six-month update of their plan covering two years before and two years after their retirement date.
The final result? That $1 million nest egg that seemed so remote 25 years ago is all theirs—and they’re still growing it when they can, even in retirement.
Build Toward a Successful Retirement With LightForce Financial
LightForce Financial can help you learn successful strategies for retirement investment no matter what stage of life you’re in. To schedule an introductory meeting, call (817) 896-2744, email gerald@lightforcefinancial.com, or select an appointment online.
About Gerald
Gerald Robinson is Founder of LightForce Financial, a fee-only financial services firm based in Denton County, Texas, specializing in guiding multi-generational families and small and mid-sized business owners through the inevitable—change. Gerald and his firm provide one-on-one service and a long-term approach to goal achievement. He’s fulfilled by developing long-term relationships with clients as he helps align their wealth and values through a personalized financial plan.
After graduating with a BBA with a focus on finance and statistics from UNT, while serving in the United States Marine Corp Reserve, Gerald began a long career in mid-management of a large retail food chain. In 1999, with the desire to serve clients by building a business that would be of value and positively impact their lives, he returned to his roots and began his journey as a financial professional. In 2009, Gerald acquired his CERTIFIED FINANCIAL PLANNER™ designation, and now serves clients as an independent CFP® professional on a fee-only basis—no commissions. For over 30 years, Gerald has lived in Flower Mound with his wife; he also has three children and five grandchildren. In his spare time, he enjoys staying involved in his community, serving on various commissions and boards. To learn more about Gerald, connect with him on LinkedIn.
This presentation is not an offer or a solicitation to buy or sell securities. The information
contained in this presentation has been compiled from third-party sources and is believed to be reliable; however, its accuracy is not guaranteed and should not be relied upon in any way whatsoever. This presentation may not be construed as investment, tax or legal advice and does not give investment recommendations. Any opinion included in this report constitutes our judgment as of the date of this report and is subject to change without notice. Additional information, including management fees and expenses, is provided on our Form ADV Part 2 available upon request or at the SEC’s Investment Adviser Public Disclosure website.
Past performance is not a guarantee of future results. Diversification and asset allocation do not ensure a profit or guarantee against loss. Registration with the SEC does not imply a certain level of skill or training.