Why It’s Important to Start Working With An Advisor In Your 30s or 40s
One of the most underrated forces in the world is the power of small but consistent change. For example, suppose NASA is launching a rocket to the moon but miscalculates by just one degree.
After one mile, the rocket will be 92 feet off course. Not bad, right? But by the time it reaches the moon, the rocket will be off-target by over 4,000 miles.
The power of small changes can also apply to you and your bank accounts. But instead of miles, you could miss out on thousands — even tens of thousands — of dollars.
Hiring a financial advisor in your 30s and 40s is key to tweaking your savings rate, filing taxes more efficiently, and improving the financial course of your life.
Why successful people hire financial advisors
You’ve likely been doing your own money management all your life, so taking a DIY approach seems like it makes sense. So, should you use a financial advisor or do it yourself?
Working with a financial advisor is a big decision. But reacting to things after they happen won’t be enough to achieve big financial goals or grow significant wealth.
Instead, take a proactive approach to actively seek ways to accomplish what you want. It’s what successful people do — even people at the top of their game need backup to help them reach their goals.
Think about this: Why does Simone Biles need a coach? She’s been nailing flips for years; can’t she just coach herself? Why does Zendaya hire a stylist? She crushes the runway with her style; can’t she choose her own outfits?
Simone Biles is an amazing gymnast, but it’s tough to critique your form and improve on your own. Zendaya might be a natural beauty, but that doesn’t mean she’s on top of fashion trends.
Rather than leaving their future to chance, these successful people surround themselves with experts. That way, they can focus their attention on their main objective — and the same scenario is true for you, too.
You may have a career, family, friends, hobbies, and life goals to focus on. Don’t spend your time, energy, and mental space on things outside your zone of genius. Hire a financial advisor to track and manage:
Investing strategies
Interest rates
Tax planning tactics
Financial goals
Wealth-growing options
An expert can keep you on course and offer financial advice to help you efficiently fund financial goals like family vacations, home improvement projects, and new home and vehicle purchases without racking up debt.
Make the most of your next 20-30+ years of work
Your 30s and 40s are some of the most critical times of your financial life. Most people in this age range have consistent income. However, you also have many financial goals.
For example, you might be thinking about how to:
Manage retirement planning
Buy a house or investment property
Afford to start a family
Save for a college fund
Take your dream vacation
Pay off your debt
It can also be a time of financial stress — maybe you make a decent income but have significant debt (student loans, car loans, credit cards) weighing you down? Or your parents might be getting older and rely on you for some financial support.
You have an enormous amount of potential when you’re in your 30s and 40s. To maximize your resources for the best future, being efficient with your personal finances and cash flow planning is crucial.
Let’s refer back to the NASA example. If you’re off-track financially by the smallest amount in your 30s or 40s, it’s not the end of the world. You still have time to make changes.
But continuing on the same path without a course correction could mean you end up thousands of miles away from your target later in life. This is one benefit of hiring a financial planner: They can act as your copilot, helping you redirect your course and meet your financial goals.
Filter out the financial “noise”
If you’re like most people, you entered adulthood with little knowledge about finances. Financial education isn’t a topic you learn in school. Even if you attended college, it’s unlikely that you were taught about investing, mortgage applications, and filing taxes.
You might have turned to Google for information to help you manage and make decisions about your finances.
While the internet is an incredible tool that makes it possible to teach yourself almost anything, it has a lot of “noise.” For example, you’ll find rules of thumb, guidelines, opinions, and perspectives. But it won’t give you the best answers for your circumstances, values, goals, or interests.
You might feel embarrassed to talk to a financial planner — don’t be. The sooner you reach out, the sooner you can build a plan based on the objective facts and figures of your situation.
Maximize your financial returns
Working with an advisor in your 30s and 40s can help you increase your financial returns. To maximize your outcome, you need to tap into the power of small changes. An advisor can guide your finances and investments by:
Freeing up money in your budget, allowing you to contribute more to your goals and investment accounts.
Helping you achieve a higher return on your portfolio than you might get by yourself.
Recommending different asset classes and diversification strategies based on the changing economic situation.
All three of these strategies can be the difference between retiring with a few hundred thousand dollars or several million dollars. For example, suppose you start with $5,000 and invest an additional $100 per month with an 8% return. After 30 years, you’d have $203,714.
Now, what if you work with an advisor who helps you free up some cash so you can contribute an extra $300 per month? There, you’d have $650,822 invested — over three times as much.
The bottom line is that working with an advisor in your 30s or 40s is crucial to your financial future. If you are interested in learning more, contact a financial planner to go beyond a standard financial plan.