Uncover the Tough Money Advice Clients Hate to Hear

You're Not Saving Enough

Financial planner Don Grant works with clients at different life stages. Those nearing retirement are often shocked to learn that they may not be saving enough for both retirement and their kids' education. As an investment advisor with Fortis Advisors in Wichita, Kansas, Grant has seen firsthand the importance of saving. "I've had to convince a couple of people to work a few more years," he said. "If you're not putting away enough, you might outlive your savings."

Your financial planner can assist you in examining your income, assets, and future retirement needs. This helps determine how much you should be saving and investing to maintain your desired lifestyle. Grant emphasizes the need to start a 529 plan for your children's education, suggesting saving about 60% of the expected tuition cost. "Susie may be a great tennis player, but college still requires funds," he notes.

You Need to Take on More Risk

When the markets are down, it's tempting to cash out investments. However, Grant warns against this. "On average, one out of every four years the markets are down, but the average recovery takes about 400 days," he explains. "We need to trust the history of the stock market and other investments. Our advisors have helped us invest wisely, and we shouldn't abandon our goals due to short-term market fluctuations."

For small business owners, taking on more risk means investing beyond their own companies. Entrepreneurs already face risks in their businesses, but they often hesitate to invest in the markets. "They prefer CDs, but the pandemic showed the importance of diversification," Grant says. "If your small business is hit, you may need to rely on other investments that performed well."

You Can't Afford That Much House

Purchasing a home is a significant decision that involves more than just the mortgage. Homeownership comes with maintenance and management responsibilities. "It's an asset, but it also drains your time and money," Grant remarks. "When considering how much house you can afford, factor in all the upkeep."

While homeownership is beneficial, it's essential to be realistic about your financial capabilities. Grant encourages clients to focus on their long-term goals and not get carried away by the dream of a large house. "Have a plan, monitor it, and base your spending on that plan," he advises.

Retirement Planning: The Best Robo Advisors

Institutions like Robinhood and SoFi investing offer IRA matches to help your savings grow. Starting your retirement planning journey with these robo advisors can be a great step. It provides a convenient and efficient way to save for the future.

This article was originally published in July 2021. Javacia Harris Bowser is an award-winning freelance journalist who focuses on women's issues, wealth, and wellness. Find her on Instagram @seejavaciawrite.