November 20, 2018
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Earlier this year, we started working with a new outside strategic advisor, Josh Rochon. Josh works as an Advisor for Fourth Dimension Financial in Perrysburg, OH and utilizes Evergreen Wealth Management for helping to manage client money. Josh is a CERTIFIED FINANCIAL PLANNER™ and we thought it would be beneficial to share some of his insight. We hope you enjoy!
Recently, while meeting with two successful entrepreneurs I was asked a question that I’m often asked, “Josh, what should I do with my money?” I was a bit taken back because these two brothers are quite successful and have plenty of places to send their money. I was quickly reminded that what people are usually asking with this sort of question is if I have a hot stock tip for them. Not wanting to sound dull or give an idea that didn’t measure up to their expectations, I thought for a moment, went back to my training and offered the following: “There are only five short-term uses for money and six long-term financial goals”.
Not getting what they expected to hear, they asked me to elaborate. In general, when I walk people through the uses of money it quickly becomes evident that when they think about money from this perspective, investments (including the hot stocks) begin to play a diminishing role and financial planning starts to take priority. So, let’s look at the five short-term uses of money:
Short-Term Uses for Money:
- Service debt
- Pay your taxes
- Give charitably
- Consume it for lifestyle choices
- Build margin to save and invest
When you boil it down, you have five places you can tell your money to go. Then as your savings build, you can begin to think about the six long-term goals for money as a subset of the saving category. Here are the six long-term Financial Goals.
Financial Goals:
- Financial independence
- Debt elimination
- Starting a business
- Family needs such as dependent care or education
- Lifestyle choices like a vacation home or travel
- Maximized giving (kids, grandkids, church, and/or charity)
- I would argue the choices you make on using the money would far outweigh any gain a hot stock would bring. As I walk clients through this thought exercise, investments begin to play a supporting role and planning takes over as the priority. That’s not to say that investing for the future isn’t needed, but starting in the right place is critical to long-term success.
Thank you!
-Josh Rochon, CFP®
Evergreen Wealth Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.