You May Already Be a Future Millionaire - REMIX | Series 10.3 - Enjoy More 30s: Family Finance

Episode 3

You May Already Be a Future Millionaire - REMIX | Series 10.3

Published on: 21st November, 2022

Keep a long term view, this might just be traffic on the road to your destination.

  • ...what we can do is still pause and take a look when it comes to finances just like Lauren and I do with that last luggage check. You know, what do we actually need, keeping things in perspective. (02:14)
  • Since it took a year to recover in our example now there's only 19 years left for that same $250,000 to grow during our total 20 year period of time that we set. So instead now we've arriving at $1 million with only 19 years to grow, we arrive at a lower number, obviously, around $940,000. (04:43)
  • Yes, it's upsetting but it's upsetting because money is a tool that we're relying on to accomplish our goals. So let's frame it back into money being a tool back into the question of how will this ultimately impact us achieving our goals. (06:11)

Quote for the episode: "So if we can still very reasonably expect to be on a substantially similar path for our goals, if we can frame our mindset as such, then we can really look at all of this a little bit more as perhaps traffic on the highway to our destination." (06:26)

Securities offered through TFS Securities, Inc., and Advisory Services through TFS Advisory Services, an SEC Registered Investment Advisor Member FINRA/SIPC. TFS Securities, Inc., is located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.

Transcript
Voiceover Audio:

Welcome to the Enjoy More 30s Family Finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out, and distract our focus

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from simply enjoying life.

Joseph Okaly:

Hello, and welcome to the Enjoy More 30s Family

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Finance podcast, REMIX for Rising Rates. In 2022, there

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have been significant declines across pretty much every major

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asset class through the end of October. With rates rising

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significantly for the first time in a long time, it can be a very

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unnerving experience. So what we're doing on this series for

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you is going to attempt to kind of help you with that difference

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in what we're experiencing, going back and re-mixing a

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number of the past episodes to help you emotionally navigate

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what have been turbulent times. Each week, I'll be re-mixing a

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different episode bringing what I would say are timeless

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concepts back into focus of the present day situation. As

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always, before I begin, please share and like please leave

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reviews. I'd love to reach and help as many young families out

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there that are just like you.

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Today's episode is a remix of the You May Already Be a Future

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Millionaire episode back in Season One. As parents, you

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know, there's a ton of packing, if you ever take your little

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ones on vacation. In our home, my wife, Lauren does 99.9% of

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the packing. She's fantastic. I would say if I put out that,

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hey, I do .01%, it could potentially be overshooting my

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actual contribution. My involvement really only comes in

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at the end. Lauren does all the packing, she organizes

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everything. And then I kind of look at everything with her to

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say do we need you know, five of these are what we could do with

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maybe three or four of those instead, because I'm going to be

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the one that you know, it's carrying most of the bags. Now

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I'd rather very much so carry 10 heavy bags and not be missing

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something that would prevent a meltdown from a child in the

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middle of the airport or the hotel. However, I also don't

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want to mule carry, you know, way more heavy bags that I

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necessarily have to. On vacation, we don't have that

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crystal ball. And we don't have that crystal ball when it comes

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to living our life either. But what we can do is still pause

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and take a look when it comes to finances just like Lauren and I

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do with that last luggage check. You know, what do we actually

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need, keeping things in perspective.

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So projecting where your investments are going, gives you

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an idea of where you're at. And a lot of times, you could be

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surprised that if you've been doing a good job saving already,

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you may have what could turn into $1 million down the road

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If you had say $250,000 in your 401(k) at the start of this

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year, you listened to my Episode 1.3 and you used the Rule of 72

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to see what it may be worth down the road, say 20 years from now.

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If we assume 7% growth, you would come up with roughly $1

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already in your account. How this pertains specifically to

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million. So again, the Rule of 72 says if you take the 7%

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interest rate that we're assuming long term and divide it

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into that number, that 72, you get roughly 10. So roughly every

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10 years, the money should double. $250,000 doubles to

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$500,000 for the first 10 years. Then doubles again, the second

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today's environment is that we've seen a lot of our accounts

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10 years in our example to $1 million, right? $500,000 doubles

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to $1 million. So for 20 years that 250 that we have today

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would end at roughly the $1 million, according to the Rule

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of 72. If your account though, is now down 20%, how does that

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change what the projections may be? So first, let's take an

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drop down obviously this year, sometimes substantially with

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assumption and say that it's going to take a full year for

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you to recover back to that same mark. That it would take full 12

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months for that 401(k) to get back up to the 250 that it

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started on January 1st with. So how does that affect our

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what has happened so far in 2022. And what that translates

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exercise's results? As the math starts to get a little bit more

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involved because you got some odd numbers going on. I'm gonna

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I'm gonna jump in and help you out and do it for you. Since it

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took a year to recover in our example now there's only 19

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years left for that same $250,000 to grow during our

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to subconsciously for us now, because it's not a good feeling

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total 20 year period of time that we set. So instead now

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we've arriving at $1 million with only 19 years to grow, we

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arrive at a lower number, obviously, around $940,000. So

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still not too bad by any means you're not winding up with

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nothing by any stretch of the imagination. $940,000 is nothing

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that we get from that. But let's let's go into why it's a bad

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to sneeze at. And when we do projections for people that I

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would say, it's likely not to have a significant impact on any

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retirement projections, most of the time, depending on the rest

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of the person's situation, obviously. And a mere $75 a

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month increase in savings would make up the entirety of the

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feeling is because that money is a sense of security. That money

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difference according to all the assumptions that we're making

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here. So extra $75 a month, 7% for that last 19 years, and you

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make up the difference anyway, so. So essentially, if we change

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the way we're looking at it, and we shine light on it in a little

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says hey, my goals need this money to be accomplished. So are

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bit of a different way, with our example, the goal that we have

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of retirement in 20 years, say, would be very substantially

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similar, if not identical, with that slight increase the savings.

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So again, is seeing your account go down fun? No, it's absolutely

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not fun. Is it enjoyable in any way? Of course not. It's quite

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my goals now as a result getting in possibly farther away? So

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unpleasant. At the same time, we do want to try to be keeping

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things in perspective. Yes, it's upsetting but it's upsetting

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because money is a tool that we're relying on to accomplish

Joseph Okaly:

our goals. So let's frame it back into money being a tool

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back into the question of how will this ultimately impact us

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let's pause and jump into that a little bit further and just see

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achieving our goals. So if we can still very reasonably expect

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to be on a substantially similar path for our goals, if we can

Joseph Okaly:

frame our mindset as such, then we can really look at all of

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this a little bit more as perhaps traffic on the highway

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to our destination. So we're still getting to the

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how true this statement may even be.

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destination. It's just slightly slower, instead of a situation

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where our car blew up, and we're never going to reach our

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destination at all.

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Thanks for tuning in today and join us for next week's remix

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episode, How To Talk With Parents About Money REMIX. So

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after today's episode, you may see that you may still be on a

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path to a million dollars. But what about your parents who are

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already retired that aren't earning anything anymore? Are

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you concerned about their retirement now with a decline in

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their portfolios? So join us next week and we'll help you

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bridge that conversational gap. As always, please remember to

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review and share for others and if you need any help, don't

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hesitate in reaching out. I probably have helped someone

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just like you. Until next week. Thanks for joining me today and

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I look forward to connecting with you again soon.

Voiceover Audio:

The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS Securities, Inc., and TFS Advisory Services an SEC

Voiceover Audio:

Registered Investment Advisor, Member FINRA/SIPC.

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About the Podcast

Enjoy More 30s: Family Finance
Family Finance for Young Professionals.
Young families receive little to no personal finance help. We all grow up to have jobs and money, yet our education system focuses on Shakespeare and Algebra. Even professional advice can be hard to come by, with the majority of the industry chasing retirees and existing wealth.

Joe Okaly's podcast is aiming to change this, providing personal financial advice geared specifically to professionals with young families. This podcast is dedicated to making life more enjoyable for young families, by hitting on the financial topics that tend to weigh on us, stress us out, and distract our focus from simply enjoying life.

Joseph P Okaly is a CFP Certified Financial Advisor who fits directly in with who this podcast is focused on - a young professional with a family. With over a decade of experience as an advisor, there is passion and knowledge to make a difference.

Securities offered through TFS Securities, Inc., Advisory Services through TFS Advisory Services, a SEC Registered Investment Advisor Member FINRA / SIPC. TFS Securities, Inc. located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.