|  |
"Right now I have enough money to last me the rest of my life... unless I buy something.."
- Jackie Mason (comedian)
|
| |
5 for 50
Much of our financial lives boils down to managing expenses in just a few main areas. Last week I linked a piece on my blog that highlighted the 5 expenses that account for 50% or so of our lifetime costs. While they are all familiar we sometimes choose to ignore them.
Housing is the first- many of us buy more house than we can afford (or certainly more than we need). For many years this didn't end up as a big issue but it surely is now. A side issue here is how many houses can you afford? Regardless of how much money you have, you only have 365 days a year to "spend". Just how much time can you really spend in the 2nd or even 3rd house?
The next area in the article is auto expenses and that also can be a big one. Next comes the broad topic of kids- both the rearing from infancy to age 18 then higher education if that is warranted. Recent data show average child expenses of $12,000/year excluding college. I might add another subset here and that is the post college/post divorce expenses that we see so often these days. We tell clients that you can (or your child can) finance education but you can't finance retirement. Most college kids end up with some debt but the question is what amount is realistic relative to their first 5-10 year earning capacity? The rule of thumb the author outlines is broadly right- limit student debt to about one year's earnings.
Finally, retirement expenses. With many folks living 25 years or more after retirement this is likely a big number for which many are woefully unprepared. If work is ever to be optional, you have to save early and often.
Perhaps more so than ever before, the need for independent, holistic financial advice is substantial. We welcome your referrals of friends and colleagues who might benefit from our help with their critical financial events.
- James E. Wilson, CFP® My Blog
Is it Time to Dump Your Broker, by John F. Wasik. concisely discusses thing to consider when choosing an advisor. An advisor that knows you, devises a solution for your needs, and is motivated to work in your best interest usually creates a positive financial planning experience. |
|
|
|
WealthRx® is J.E. Wilson's unique wealth management process, designed with successful physicians in mind. Learn more. Contact 
