The Making of an Olympian
By Rob Wrubel, CFP®
“Winning isn’t getting ahead of others. It’s getting ahead of yourself.”
– Roger Staubach
My son practices gymnastics at the Olympic Training Center in Colorado Springs three nights a week. He is nine years old and is in his third year of training here. He started at another gym with my wife in a toddlers’ and Moms’ class shortly after he could start moving. He has lots of energy and gymnastics has given him an outlet to turn that energy into motion.
He has hit his stride this year – with lots of the pieces coming together in his routines. He has the strength needed to hold him on the high bar and rings, the confidence to compete and excel and the mental grasp of how the small changes in footwork, hand position and balance can enhance his abilities and results.
He is also the best big brother for his sister with Down syndrome.
Financial planning for your family is a lot like my son’s diligence and work in gymnastics. I work with many families who have accumulated significant assets – in their investment and retirement accounts, their homes and their businesses. Mostly, they share traits about how they have achieved a high degree of financial security. My clients are not lottery winners. In reality, very few people do gain wealth from sudden events like signing a sports contract, scratching a card for millions or discovering their long-lost rich uncle.
For most, the path to wealth takes time. The good news is that it is possible for everyone reading this to make it happen. And remember, wealth means different things to different people. My definition of financial wealth means achieving financial independence, of having the security to make choices in life without putting money first. There are many types of wealth and having time, a loving family and a purpose for each day also must be included in building a healthy life.
So what do the people who have a healthy and positive financial life have in common? This will be the first of several articles talking about these common traits.
I see that these families and individuals work towards the following:
1. Save and invest part of every paycheck
2. Spend less than they earn
3. Reduce and eliminate debt
4. Build emergency reserves
5. Insure against big risks
6. Hire professionals
7. Learn from their mistakes
8. Buy and keep their vehicles
9. Work with passion and integrity
You cannot flip a switch and create assets but you can change your financial standing quicker than you imagine. Your circumstances will change when you decide you have to change. You will need passion, energy and excitement to carry you through the first steps.
My son has spent close to eight years in some form of gymnastics. He may decide next year to stop and move to another sport. Or he may decide to continue for the next 14 years in pursuit of Olympic excellence. The coaches at his gym practice every day of the week and this practice has put some of them on the US National Team, some on the US World Team and others in the medal ceremony at the last Olympics.
Fortunately, achieving in your financial life does not have to take 25 years. You can make a difference tomorrow and see results in a short period of time.
Most of my clients have created most of their wealth through the following strategies.
1. Save money in retirement plans. Saving money is easiest when it is done automatically, before coming into the checking account. Your employer likely has a retirement plan. Start by having 5% withheld every pay period. Many larger employers match contributions to some amount. You can double that portion of your money every time you make a contribution. Ultimately, you will want to save 10% to 15% or more through this plan.
2. Pay cash. Credit cards will kill your ability to create wealth over time. You likely pay close to 18% on credit card balances. This is money you are throwing away and could be using towards you mortgage, improving your quality of life or investing for the future. Wealth creators do not finance their lifestyle today and sacrifice their futures.
3. Build reserves. You need to work like crazy to build emergency reserves. There are always going to be bumps in the road requiring short term cash needs. You might need to pay insurance deductibles or have emergency room visits. You cannot afford to go into debt or raid long-term investment accounts for these expenses.
My son’s training provides him with lifelong skills—confidence by competing in front of groups, diligence by practice, teamwork by working with others.
Achieving in your financial life means taking many small steps, practicing regularly and finding the right coaches to keep you on track and improve your performance. You will find your pursuit of financial freedom will also enrich your life outside of finances.