Encore: Pay Yourself First

Jan 27, 2017 by Andrew Clark

Its “Financial Friday” again!  In the past 5 years I have had the good fortune to do some consulting work for a national branding and marketing firm.  I have seen first-hand the effort that goes into creating a powerful tag line, one that GRABs your attention.  As I go through life, one of the things I am always on the lookout for is great branding, marketing and advertising. 

In the course of my work I travel a lot.  I fly on dozens of flights each year.  My schedule frequently puts me in the great hub airports in the country.  I make good use of the time I spend in those airports.  I study the myriad of advertisements that populate the walls.  The terminal walls in Chicago’s O’Hare International Airport are a treasure trove of awesome advertising.  I believe that hanging on the walls of O’Hare is the very best work of the very best companies in the branding, marketing, and advertising industry. 

A couple of days ago, I was walking down E Concourse in O’Hare and I saw a real grabber!  “no one ever complained that they started saving too soon.”  I live an entirely veterinary centric life so I immediately applied that statement to both veterinarians who own practices and veterinarians who work as associates.  It was a super powerful statement because I spend so much time helping veterinarians design or redesign their practices to be more profitable and helping associates manage their careers to achieve their objectives.

Although it is an unlikely question when we begin the process of managing the financial future of either an owner of an associate, it doesn’t take very long before someone says “now that I believe I can make it to the end of the week, month, year financially, how can I prepare for the long term?”   Save money is the answer to that question!

My wife Kathleen has an awesome position.  She is Senior VP of Wealth Management for Morgan Stanley.  She has a full book of business and I am NOT giving her a plug to attract more business.  I only mention her job because I am fortunate enough to have had one on one tutoring in the art of saving for 25 years. 

Three pearls of wisdom I learned from Kathleen are:

Start Early and Pay Yourself First. 

The earlier in life you begin saving you can save less each month and have more when you are ready to move on to the next phase of your life.

Whether you make $50,000 per year or a million dollars per year, human nature will encourage you to expand your lifestyle to spend it all.

Be careful of this trap.  It is easy to fall into.  New graduate veterinarians may have a high educational debt load in addition to the rest of the ordinary costs of life.  It is very easy to convince yourself that you can’t save a single dollar, “I’ll start later”. 

The average person starts saving at least six years too late.  That doesn’t sound like much but when you begin to use the money you may have hundreds of thousands fewer dollars because you gave up six years of income growth.  I follow a great blogger, “The Broke Millennial”.  She is a great source of strategy, encouragement and discipline advice.  http://brokemillennial.com/2013/05/30/breaking-down-401k-and-iras-millennial-style/

Save your money “out of reach.”

Whether you use a formal retirement instrument or not, a key to successfully accumulating wealth over a long time period is to save it where it is not easy to reach in your day to day life.  You are fighting human nature.  If money is easily accessible you will find a way to spend it (see pearl of wisdom #2)

There is an unbelievable array of good saving and retirement options available to us.  These range from online, manage it yourself, to professionally managed fee for service programs.  There is a plan out there for everyone! Start Today.  Pay Yourself First. 

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