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A new year brings with it a fresh start and the opportunity to reset and renew your goals. For many people, taking charge of finances and spending, especially after the holiday splurge, tops the list of resolutions for the new year. Once on the list, where do you start?
With 18 years of experience in private equity, wealth management, real estate investing, acquisitions and risk management, Ryan Morfin, Chief Investment Officer (CIO) at Spring Hills and Chief Executive Officer (CEO) at Wentworth, took time to provide some quick tips and helpful tools to best manage your finances.
According to Ryan, being “Financially Fit” like being fit in all things in life means you have resiliency in your finances. It means you have low debt, savings and have started to buy cash flowing assets. Meaning, you are not living paycheck to paycheck and you have limited financial stress in your life. So how can you best accomplish this?
How do you eat an Elephant? Answer: One bite at a time.
First, do not be ashamed of your debt. Realize most Americans are in this debt trap. Look at the debt load as a hill to climb. See what your FICO score is and repair it. Start making small monthly payments larger than minimum payments. Minimum payments are made to keep you in debt. It is also important to focus on any excess cash flow, and place aggressive focus on one bill. Attack that bill with all your excess cash flow and pay it off. Once you do that, go grab a nice dinner with your spouse and start again. Getting into this habit can help you to be debt free. Also, realize that debt comes from over consumption and buying more than you can afford. Want to earn more money? My recommendation; go back to school and keep learning and growing no matter your age. Every 5 years your skillset decreases by 50% – you need to skill up to stay relevant in today’s labor force.
Budgeting, budgeting, budgeting.
Knowing where you spend money will make you realize where you are over-allocating and where cuts can be made. Not until you have that monthly discipline to track expenses, will you be able to focus on areas to cut back on. Having the ability to break down spending will set you up for success. Although it may sound tedious to get out all of those bills and receipts, it’s a key factor in financial success.
How do you start a long journey? With a single step.
Saving $100 a paycheck may not seem like a lot, but it’s a start. Having established a monthly budget month over month can help in establishing a set monetary amount that you can afford to save. If you are financially fit, your savings will equate to the sum of your expenses for 6 months. Meaning the total you pay into things such as rent, phone bill, utilities and other fixed monthly expenses you may incur.
Making your money work for you when you sleep.
Nothing works harder than money when deployed correctly. Speaking with a financial or wealth advisor on your financial goals is important in understanding how to properly invest your money and find a suitable portfolio approach to best satisfy your personal goals and needs. This process will help in assessing risk of your investments
Play long term baseball.
A 401k is a qualified retirement plan that allows eligible employees of a company to save and invest for their own retirement. Simply put, it is an investment into your future. It is taken from paychecks as pretax money and It can grow based off a larger amount. It allows you to scale into the market earlier. Although many people try to play the market with 401k investments– don’t try to time it, just be in it, the American economy is the greatest engine for growth.
Ryan is the host of the podcast Non-Beta Alpha intended for financial advisors, it’s a behind the scenes look at conversations he has with CEOs and airs once a week with bite-sized content every day. A hope for the future is podcast focused on sharing his insights to the general public
Link to podcast: www.nonbetaalpha.com