Wealth management goes far beyond simply investing in the stock market. In order to be successful at anything, it all starts with building a plan. Wealth Management involves working with a licensed financial advisor to design a plan tailored to help you reach your goals. When it comes to finances, there are a lot of questions involved. Do I have enough money to retire? Can I retire earlier? When should I take social security? Do my investments make sense, given my current life situation?
When you work with us, you will be able to answer those questions and others. Together, we can build a plan that will put you on the road towards achieving your goals.
Our services related to helping you achieve your goals include but are not limited to:
Tax Focused Investment Strategies
Retirement Planning and Withdrawal Strategies
Family Risk Management
Business Planning
Legacy Planning
Education Planning
Cash Flow Management
Three Financial Building Blocks
At Tamarack Wealth Management, we believe that every financial plan must start with a solid foundation. Attempting to build a financial plan without a foundation is like trying to build a house without concrete footings. Here are three financial building blocks that you should aim to accomplish:
1. Spend less than you make
2. Build and maintain an emergency fund
3. Contribute the maximum amount to your employer sponsored retirement plan
Few people can achieve all three, especially at a young age. That said, these should be the first goals you accomplish before you tackle additional planning and investing.
Spend Less Than You Make
Yes, it sounds simple. But for most people, it’s one of the hardest habits to form. Notice that this principle isn’t “spend what you make” it’s “spend less than you make.” The difference is important. Spending less than you make leaves excess funds you need to save, invest, and handle surprises without going into debt.
On the average month, does your checking account go up or down in value? If down, take the time to track your spending and figure out where your money goes each month. Mastering this first step will be crucial in your ability to accomplish steps two and three.
Build and Maintain an Emergency Fund
Without an emergency fund, an unexpected expense can completely derail your financial progress. This emergency fund will keep you from reaching for credit cards or loans when life throws a curveball. How much should you keep? It depends on your comfort level and your situation. Someone with a stable job and few dependents might be fine with three to four months of living expenses set aside. Someone who works on commission or has a family might feel better with closer to 10 or 12 months saved.
The exact number matters less than your ability to sleep well at night. Start small and build up gradually. When you get a raise, fill up your emergency fund first before adjusting your lifestyle.
Contribute the Maximum Amount to Your Employer Sponsored Retirement Plan
The first and best place for most people to invest is in their employer sponsored retirement plan. These plans (401(k), 403(b), SEP-IRA, 457, etc.) often offer features that can’t be replicated anywhere else.
These plans come with two huge benefits: tax advantages and employer contributions. Every dollar you contribute typically lowers your taxable income for the year, meaning you pay less in taxes now. Many employers also match part of your contribution which is, quite literally, free money. If someone offered to double part of your paycheck, you’d take it, right? That’s what a match does.
Even if you can’t afford to max out your plan right away, contribute enough to get the full employer match. Then, as your income grows, increase your contribution rate each year. A great rule of thumb: when you get a raise, bump your retirement contribution by half of it. You’ll still feel the benefit of higher take-home pay while increasing your long-term savings.
Conclusion
Start by addressing these three building blocks and you will have a firm foundation to build upon. Once you have these under control, you can start working with us to pursue your longer term goals.
Securities offered through Cetera Wealth Services LLC, Member FINRA, SIPC, Advisory services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity.
