By Beth Buckley Morgan– Family Business Wealth
Wayne Gretzky said, “A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.” Being able to do this requires vision, an understanding of your sport and the ability to fast forward in the action to a future point in the game. Learning this skill is tremendously valuable in sports because you put yourself/your team in a better position to score and win.
Creating long term wealth requires a similar vision. Cultivating the ability to picture the outcome that you desire in your life – your net worth, the type of home you want to own, the experiences you want to have, the influence you want to have in the world – is essential to scoring financially.
Here are 5 strategies that may help put you in position to win:
1. Start early As an athlete, you likely have natural skill. While this is a true advantage, you could not have achieved what you have without countless hours of training. Early mornings, sore muscles, injuries, travel and doing what others are unwilling to do go with the turf. Chances are, the skills you have today began forming many years ago and have been refined through the years. In a similar way, long term wealth requires time and sacrifice as well as the discipline to forgo current wants in order to work towards future rewards. Learning from the mistakes that you have made and getting back up after setbacks is critical to your long-term financial independence.
2. Live on less, invest the rest Living below your means – spending less than you earn – allows you to have extra money to save for the big things down the road. The idea is to pay yourself first. If you start early and put money aside for yourself for both emergencies and long- term goals, you will soon see that your future is taking shape. Make this a habit starting now. Set up automatic savings directly from your paycheck so that you remove the temptation to spend it.
3. Educate yourself As it is important to learn the rules of your sport, you must also take the time to learn the rules of money. Do you know what compound interest is? How stocks and bonds work? Understand real estate, lending and borrowing? Know the language of business. Subscribe to the Wall Street Journal and Forbes. Load the CNBC app on your phone. Talk with others about money. Get comfortable with the lingo. Listen to the experiences others have had. Learn from those who have been down the road that you are traveling. Be a sponge, become a lifetime learner.
4. Start investing Once you have set aside a pool of money for emergencies – car repairs, etc. – begin systematically investing into a mutual fund that suits your tolerance for market volatility. Know that when the markets are going lower, you have the ability to buy more shares with the same amount of money. When the markets are riding high, that same amount of money will buy fewer shares. Over time, particularly if your funds distribute dividends and you are able to reinvest, you have the opportunity to accumulate a larger pool of shares. As a professional athlete and beyond, you may have large paydays that require a higher level of planning and expertise. When this describes your life, it is essential that you move cautiously, learning all that you can and surrounding yourself with highly qualified, ethical professionals. Your financial team can help you create a plan designed to preserve your windfall and create multiple streams of income that may sustain you throughout your life.
5. Get a coach As an athlete; you have likely had many coaches throughout your career. The exceptional ones helped you see the future. They saw your potential, nurtured it and guided your training so that you were able to maximize your potential. They knew your unique strengths and weaknesses and were able design customized training routines to develop your talents. Financially, your team of coaches will have expertise in a variety of key areas that may help protect you legally, plan for and minimize taxes, manage assets and prepare for the future. Ideally, these key members of your financial team work together for your benefit.
Creating long term wealth is possible, whether you are starting small or have received a windfall. As with your training, discipline is essential for your success. Play where the puck is going to be. Life has a way of moving very quickly. Forming good financial habits now will put you in position to win at life.
Securities offered through LPL Financial. Member FINRA/SIPC.
LPL Financial and Family Business Wealth are not affiliated with apc-sport.com.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing in mutual funds involves risk, including possible loss of principal.Dollar cost averaging involves continuous investment in securities regardless of fluctuation in price levels of such securities. An investor should consider their ability to continue purchasing through fluctuating price levels. Such a plan does not assure a profit and does not protect