Connecting Money Multipliers

By: Tom Kirk

I have recently written about three powerful money multiplying principles: The Five Stages of Financial Life (see the entire section of our website dedicated to this topic); exponential vs. linear growth of money (see my blog post dated May 16, 2016); and avoiding the two biggest mistakes, concentrated investing and market timing (see my blog posts dated April 6, 2015). This blog post connects these principles in a dynamic way.

When you read about The Five Stages of Financial Life you can’t help but compare the actions and behaviors that should be occurring at each stage to what is actually happening in your own life. When you do this, several things can happen. You may think you are ahead of the game. You may think that you are right about where you should be. Or you may think you are behind. If you think you are ahead of the game, congratulations! You are less likely to fall into the trap I describe below. Because even if you think you are where you should be, it doesn’t necessarily feel that way. And if you think you are behind, the trap is waiting to be sprung.

Here is the trap: You feel you have to do something really heroic with your money if you are ever going to have enough. You hear that “everybody” is making a killing in fill in the blank (real estate, gold, tech stocks, commodities, etc.). You want some of that action. So you attend a seminar, read a newsletter and decide on putting most of your money into this “sure bet,” because now you know the secret. But unfortunately that’s what it is, a bet. And like other forms of gambling, a few hit the jackpot, but most lose, and some lose everything. Right when you need your money to be working for you so that one day you won’t have to, you now have significantly less than you started with.

To help avoid being caught in this money killing trap, you need a WealthPlan. One that forecasts your future wealth based on realistic assumptions. You can then regularly compare where you are at any given time to where you were projected to be. You can update your WealthPlan for changes in your life to increase the accuracy of the projected results. You can see how the growth of your money invested in an appropriately diversified portfolio does not require you to take a gambler’s risk in order to achieve your goals of financial independence. Your confidence in your financial future is sufficient to not be lured into any “get rich quick” scheme that might come your way.

We see these realities in our clients’ lives every day. They not only have a WealthPlan, but also a WealthCoach working side-by-side with them to help them progress through their stages of financial life and experience the financial futures they dream of.

If you would like to be more confident about your financial future, please visit our website where you will find complimentary resources you can use. Or call our wealth services firm in Satellite Beach, FL – Melbourne/Brevard area at (321) 773-7773 to schedule your complimentary consultation.

You should not assume that any discussion or information contained in this publication serves as the receipt of, or as a substitute for, personalized investment advice from FirstWave Financial™. A copy of FirstWave’s current written disclosure statement discussing our advisory services and fees is available upon request.