The brutal truth of getting ahead financially is not just numbers; it is a mindset. Anyone who truly wants to begin to invest, or take investing to the next level, has to have the right mindset. There is no getting rich quickly. If it happens, it's luck. One cannot plan for luck. We can wish for it and hope it comes true, but what if it does not?
When I advise hard-working Americans, I implore them to take care of their foundation as a backup. If you don’t get that promotion at work. If you don’t start and succeed at your own business. If you don’t get rich with Crypto or win the lotto, have the foundation of traditional planning as a backup. For those who do not have a complete understanding of their budget and goals, I can assure you that their wants and dreams are very likely to NOT make their goals a reality.
Having been a financial advisor for almost 20 years, with a background in investing for 25 years, I have had the privilege to use others' hindsight as my foresight. I walked away from the industry as a licensed advisor to become a financial educator. The cold, hard truth is that everyone, from every walk of life, no matter what religion, culture, sexual orientation, have the same experiences with money when we are Not Born Rich. People don’t regret the things they did; they regret the things they did not do. Many people die rich, but very few live rich. With proper planning, you can have both.
No one has ever asked, towards the end of their lives, “Why did I invest so much? I have extra money in my IRA, in my 401k, too many real estate properties, and I am leaving behind too much to my family. Why did I do that?” However, many people do say “I wish I had opened an IRA, I should have bought stock, I should not have just relied on my 401k, my pension, my social security, I should have had multiple accounts.” Anyone can do it. You just need a plan. People don’t plan to fail; they fail to plan. Remember, if you aim at nothing, you will hit it with amazing accuracy.
One of the sad truths is that financial services firms have what they call an ideal client profile. The majority of financial services companies require six figure minimums for investment management, and typically a six-figure income. That is the top 10% income earners in America. What about the other 90%? They are left to figure things out on their own. Think about it. You have been to your bank many times. How many times has the bank employee told you that they want to introduce you to the in-house financial advisor sitting in the bank to help you with your financial planning journey, so you and your family can be in a better financial situation? If you are not sitting on at least a hundred thousand dollars in your checking account, I can almost guarantee they have never tried to assist you. It's not ill-intended, it's just the way it is. No one cares if you’re not rich. It is up to you to take the steps to educate yourself, take action, and hold yourself accountable. But where and how do you get started? Where do you start to look? What do you research? I love the saying, “A fish does not know it is wet.”
The trick is to identify what you want for yourself. After dedicating yourself to a lifetime of work (your job/career), what do you want to do with the remainder of your time on earth? When you figure that out, you can figure out how much your desired lifestyle will cost per year. Do you need to maintain the same standard of living as you did when you worked (have the same income not working)? Would you like an enhanced standard of living (have more money than when you worked), or a decreased standard of living (have less income than when you worked)? If you want to Netflix and chill, then maybe a decreased standard of living will be sufficient. However, if you want to travel, eat out every day, hang out with family and friends, join the country club, or have that dream car, you will most likely need more money to do these things. This is why identifying what you want for yourself is imperative, so you know what to aim at.
After identifying your goals, you have to factor in taxes and inflation because most of your accounts, such as social security, pension, traditional IRA, 401k, and 403b’s are tax-deferred. This means you will pay down the road when you take money out, or start receiving money. If you did a good job planning, then you may owe more in taxes not working than you did when you worked. The mindset that you pay less in taxes when you retire is true if you don’t have much income or assets. But financial planning is not dreaming about living in poverty with low income. Odds are you will be in a higher tax bracket when you retire than when you were working if you planned and invested.
Then, you have to realize that on average, money loses half its value every 24 years (inflation). Most of the workforce currently will have their money lose half its value twice in their life. Meaning that if you have a plan in today’s dollars projected to give you, say, $60,000 a year, f you didn’t account for inflation, that plan will give you the equivalent of $15,000 a year ($60k > $30k > $15k). So, you need to outperform inflation.
This takes an extreme amount of financial literacy to not only understand these concepts, but to learn how to apply them to your unique situation. Fear not. I wrote the guide to financial literacy, Not Born Rich. This book is not only designed to give you the perspective to think differently and plan to obtain money, experiences, and other things today, tomorrow, and forever, but to TEACH you how to plan for yourself and get the life you dreamt of. The life you deserve. Pick up your copy, and refer it to someone who wants to drastically change their financial situation. It’s time the Not Born Rich do what the privileged rich have done since the beginning of time.
“There are a lot of people who die rich, but few who live rich.” Investing since the age of 18, and now at age 43, with nearly two decades of experience as a financial advisor, JDR has spent twenty-five years in the markets with one goal in mind: to secure the freedom to enjoy his time on Earth with the people he loves. Not born into wealth, he built it through discipline, intelligence, and a practical understanding of money, and now uses that experience to teach others how to build financial security without sacrificing the present.
As the author of Not Born Rich, JDR offers a blueprint for those who didn’t start with a trust fund but want to finish with a legacy. He believes true wealth means using money as a tool to live well: spending time with family, treating others with respect despite differences, and caring for the world we share. The book Not Born Rich by John D. Romero is available now on Amazon.
