The Time Value of Success Issues

The Time Value of Success Issues

November 9, 2022 All Articles Financial Planning Life Planning 0
Success

It doesn’t take rocket science to employ time value of money – it’s simply the power of time and compound interest.

If you started saving $1,000 a month at 20 years of age and it earns 8% a year, this would mean you would have almost 5.3 million dollars at age 65. But….

If you wait 10 years to start saving, you would need to save about $2,300 per month to get to the same number. The cost of waiting 10 years means a total of about $425,000 more out your pocket to reach the same savings sum.

Yet even at 30 years of age, most people aren’t thinking about retiring and certainly aren’t making it a priority, so why would they be thinking about it at age 20? Perhaps this is why wisdom gained is usually a result of prior decisions and, well, age. As in so many instances, this where time is something you just won’t get back and it proves costly.

Nevertheless, this doesn’t mean you should beat yourself up and give up altogether. For one thing, you are probably in the same boat as most Americans. 20-year old’s who can actually save $1000 each month tend to be the exception.

We usually come to know the families we work with around retirement age, not often in their 20’s, 30’s, or even 40’s. Some are 50 or 55 looking up from their empty nest for the first time with a focus on their finances. Some of them are between 60 and 65 with a slight panic in their eyes. Then there are those over 65 looking for the magic bullet, which too often just doesn’t exist.

This is where we need to start talking about the time value of success. Cash may be king, but it isn’t everything for successful families. Success can compound in the same manner as money, but it also gives birth to complexity – also known as issues. The more success you gain; the more issues you tend to gain whether you want them or not.

More than once I have heard successful people say that it would be easier to be broke. We may laugh, but there is a lot of truth in that statement.

The typical response when we begin to see these problems pop up is to address the ones we must and maybe address the ones that are painstaking or painful if we can. The rest of these problems just get shoved under the covers, so that we can keep rolling along.

The first problem with addressing the issues in this manner is that you are taking care of them ala carte. The left hand doesn’t know what the right hand is doing. In other words, what you do to solve a problem today may only be creating a bigger problem in the future.

The second problem is that these issues are compounding. When you do finally get to a place you can address these issues, you are pulling your hair out and at a loss. You are now in the middle of a forest and it may take you as long to get out as it took you to get there.

The last problem, but not the least, is the realization that you spent an entire lifetime of building your success only to watch it fall apart with a single, tiny issue that could have been solved decades ago in advance.

The time vale of money is a very good thing. The time value of success is a very good thing.  But addressing the time value of success issues? That can get interesting:  What do you do? Where do you start? A lifetime of success can a feel a little overwhelming when you start to look at it in this manner.

The good news? This is where we come in. You don’t have to do the job alone. You probably don’t even have to do a lot of the heavy lifting. You just need to help us set up a foundation. We do this with 3 simple steps:

  1. Begin with the end in mind – Stephen Covey couldn’t have said it better about almost anything in life. You can’t know what to do if you don’t know where you are going. Help us understand where you want to go.
  2. Paint the picture – We get nosy, but for a good reason. If we don’t really understand everything about your current situation; future and goals; family dynamics; feelings about money, risk, and reward; we will be lost.
  3. Navigate – It’s our job to uncover the dangers, gaps, and overlaps in your plan. It’s our job to work with your other professionals and experts to explore the strengths and opportunities you can employ to accomplish your goals. The thing we can’t do is steer the ship. We will look to you to give us direction as to which of these issues and opportunities you want to ultimately address and in what manner.

Our tag line is helping people live Life on purpose™. Life is too short to not live intentionally. Now…imagine the power in the time value of intentionality! That is something to be reckoned with. So, when will you begin?

 

Securities offered through Calton & Associates, Inc. member FINRA and SIPC, a Registered Investment Adviser. Investment advisory services offered through Smart Money Group, LLC, a Registered Investment Adviser. Smart Money Group, LLC and Kennedy Financial Services, Inc. are not owned or controlled by Calton & Associates, Inc.