There can be a lot of confusion around achieving financial freedom, getting from where you are right now to that point where you never have to work another day in your life. What type of compound account should I use? How much money should I be putting away? How long do I have to contribute for? All these questions can freeze you up and stop you from getting started.
Fortunately for you on today’s call/article, we have a very special guest, Jeff Blosil, from the Bright Advisor Team, a.k.a. Mr. Math. Jeff is here to help us with five steps to achieving financial freedom.
My name’s Scott McLaine. I’ll be your host on this episode of Breaking It Down. On today’s episode, we have a very special guest, Jeff Blazer, coming out of Seattle, Washington, on the Bright Advisor team. Jeff has five steps to achieving financial freedom.
I thank you for being on the show. So, Jeff, you must be in the financial services industry for a while to come up with some steps. I know you’ve been working with those folks, just getting started with their financial futures. What caused you to create these five steps?
Yeah, I’ve noticed a lot of these young folks, they’re so afraid of making the wrong decision that they do even something worse, by not making any decisions. So fast forward a couple of years, and they’re still doing nothing because they don’t want to make the wrong decision. And now they’ve lost all this time that they could have had to be able to grow the retirement accounts.
I’m here to help all these young folks come up with five simple steps to better get your path. A retirement rock solid from the get-go.
That sounds great, Jeff. Let’s go ahead and dig right in. What’s step number one?
Step 1: How Much Spendable Income Do You Need
In the finance industry, advisors tend to focus on your nest egg. But what is more important than a nest egg is how much spendable income you will have when you retire. So the first step is determining how much income you need during retirement.
I think that’s fantastic. Jeff So instead of focusing on saving up $1,000,000, which seems daunting and almost an unachievable task for a lot of folks, especially when they’re first getting started in life, you’re saying focus on the amount of money that you want to have in retirement. $3,000 a month, $5,000 a month or something like that. Is that what you’re saying?
Exactly, that’s correct, Scott.
Okay. So you have a plan for working towards that. All right. Got it. So what’s step number two?
Step 2: When Do You Want To Retire
When do you want to retire? Do you love your job and you want to retire at 70 or later? Or do you want to stop working as early as possible and retire around 45-50? You need to set a time frame for retirement.
And Jeff, without getting into too much detail, is it possible for someone in their twenties or maybe even in their thirties that just started saving for their retirement or investing into their retirement to retire by 55 or 45 or can you accelerate their retirement for them?
Yeah, 100%. So I’ll take my personal case, for example. I started my compound interest account when I was 30 years old. With what I’m doing, the account that I chose, I projected, I can retire at 55 years old with 100 grand a year, tax-free for the rest of my life, starting at 55. That’s pretty amazing.
That is pretty amazing, Jeff. I think I’m going to have to schedule an appointment with you and figure out what your secrets are. So so let’s go ahead and take a look at step number three.
Step 3: How Much Can You Contribute Per Month
You need to figure out how much can you afford a month. There’s a balance between putting enough money into retirement that it’s a little bit of a sacrifice, but also not stretching yourself so thin that you’re not able to make ends meet and you’re not able enjoy time as you’re with your family or hobbies that you choose.
So how much can you afford this month? I recommend starting at about 10% of your income.
Whatever you’re earning, just take 10% right off the top and put it away now.
Well, I guess I’m I’m curious, where do we put that? Like, does that go into a 401k or an IRA or what?
Step 4: Choose A Compound Account
Yes. Number four is choosing your compounding account. What I found for a lot of young kids is that putting money into an IRA isn’t the best choice because you’re essentially forced to work until you’re 60 years old.
If that is your goal, then that’s fine. There is nothing wrong with working until you are 60, but if you want to retire earlier than that, then there are other vehicles out there to put your money into to allow you to retire earlier whenever you want, and also with a tax-free income for the rest of your life.
Jeff, it occurs to me that you’ve thought this through and you’ve obviously helped folks get started and you have answers, and that makes me feel confident and comfortable talking to you and getting started with you. What is step number five?
Step 5: Start Today
So number five is get started right now. Don’t delay. Start today. Time is on your side. But the longer you wait, then the more it’ll take to get you to your goals when you want to get there.
Jeff It also occurs to me that you’re sort of a matter of a fact kind of guy. It’s don’t, don’t, don’t waste any time. Just get to it. Let’s make this happen. There are no more excuses. You’re either going to grow wealth or you’re not. And if you want to do it, they need to talk to you.
That’s right. Money is as simple as you want to make it or as complicated as you want to make it. And I like to make things as simple as possible. So get with me. Let’s break it down. Let’s build your amazing plan.
Awesome. Jeff, thanks so much for being on this episode of Breaking It Down. Look forward to bringing you back again. My name, Scott McLaine. It’s not what you make. It’s what you do with what you make.