At Aptus, we view financial planning as an ongoing, life-long process. There’s not really a bad time to start that process, though of course the earlier the better. It’s a really good idea to have a long-term relationship with a trusted advisor so you have a 2nd set of eyes on the many financial decisions you will face, big and small, over your lifetime. There have been several events in my life when, in retrospect, it was painfully obvious that I needed the help of a financial planner.
Many of our financial planning clients are young professionals who seek us out immediately before or after a big jump in income. These young clients are wise and I wish I could get them to talk to my 30-year-old self. In 1997, I was a year out of business school trying to make ends meet on a modest salary as a junior equity research associate at Solomon Brothers in New York. I was working 70 hours a week and living in a basement apartment in Jersey City. One day my phone rang and an old friend whispered something strange and exotic into my ear. It was kind of like when Mr. McGuire whispered “plastics” to Benjamin in The Graduate. My friend whispered, “Little Rock.”
Thus began my migration from the basements of Jersey City to the tree-lined streets of Little Rock, Arkansas. And with that move came a five-fold increase in income. At this point in our story, I needed a financial planner. I didn’t look for one. I had a master’s degree in finance after all, so I assumed I could do it all myself. Now to be honest, I’m probably lucky I didn’t look for an advisor to help with a plan because I probably would have ended up with a hokey whole life insurance policy [or worse]. Aptus didn’t exist then.
The reason I needed a financial plan in 1997 was that I had a lot of decisions to make, many of which had long-term implications. I needed a plan to help me consider my life path as it related to money. I don’t think I was ever under the delusion that I would be a stock analyst in my 50s. The demands of the job were too great and the travel schedule too intense. Especially with that in mind, what I really needed to do in 1997 was chart my course to what we at Aptus call a “work optional” date.
Money can’t buy happiness, but it can buy freedom. I was embarking on a career in a high-pressure field with uncertain income and zero job security. A wise 30-year-old me would have formulated a plan to live well below my means to achieve my vague goal of getting out of the business before I was 50. I wasn’t wise. I was rollin’ in dough, or so I thought. I bought a house, a luxury car, really expensive suits and a very nice watch. I’m a country boy from Iowa, so I wouldn’t have known what a lavish lifestyle was, let alone been imaginative enough to live one, but I wasn’t exactly watching my pennies either.
I moved to Little Rock for the job but I stayed for the girl. This is the second, and perhaps most important, juncture where I needed a plan—for both of us. If it was important for me, as an individual, to have a financial plan to support my goals, it was absolutely critical that my wife and I have a detailed, explicit, shared plan for how we would spend, save and invest in order to reach our joint goals. And, of course, we made no such plan and there was no mutual agreement on our long-term financial goals.
We continued to ad lib our way through the birth of our two kids, the construction of a new dream house, a couple of stock market crashes and the ebb and flow of my career. As I struggled through my 40s and dealt with the inevitable mid-life crisis, reality set in. I was approaching 50 and I was completely burned out. I didn’t have a plan. I had not quite reached a “work optional” level of wealth. I knew I needed a change, but I wasn’t in a financial position to take a leap of faith. But I took that leap anyway, ha!
This is the third time I clearly needed a financial plan. As I embarked on a significant career change with (even more) uncertain income, I probably should have worked with a planner to explore the practicality of that decision. A friend asked how I was able to take that leap. I told him the key was to not care where I landed. I probably had enough confidence in my decision to know it would work out…somehow. It did. But, dang, it would have been a lot less terrifying if I had tested my assumptions with a trusted advisor.
I’m a DIYer at heart and often reluctant to seek help from professionals. If I’d worked with a trusted advisor throughout my life, though, there would have been far less financial drama. If you are a young professional in the midst of a significant step up in income—and I’m looking at you new attending physicians—talk to a planner. Your 50-year-old self will thank you.