When people see my business card I am frequently asked the question – What is Wealth Creation Consulting? Is that just for your rich clients?
The short answer NO, Wealth Creation Consulting is just as important for any income bracket. What follows is an explanation of why.
For starters, Success Path Consulting employs financially knowledgable Wealth Creation Consultants as opposed to Financial Advisors. The goal of our Wealth Creation Consultants is to educate our clients on the fundamentals of wealth creation, so the client is prepared to make sound, informed, self-directed financial decisions.
Most people in our culture spend a great deal of time thinking about how much money they make, and are frequently trying to figure out how to make more. Simultaneously these same people spend very little time determining how best to allocate their paychecks. This mistake is the number one obstacle to wealth creation. When it comes to financial security and wealth creation, in the vast majority of cases, how much you make is far less important than what you do with your monthly paychecks, whatever the amounts. Sure, it would be nice to make $3 million a year instead of $25 thousand a year, but whatever your salary, you can’t afford to be uninformed, put your finances on auto-pilot, or wait until next month or next year to become informed.
Why you ask? It takes less than a paragraph to prove my point. It might surprise you to know that 78 percent of N.F.L. players are bankrupt or having a hard time making ends meet within just 2 years of retirement. For N.B.A. athletes the statistic is 60 percent within 5 years (source: Sports Illustrated Magazine). These are individuals who make salaries that are millions of dollars more than the average American, yet the nationwide bankruptcy rate in 2012 is just 1 bankruptcy for every 450 adults (NBKRC Monthly Bankruptcy Filing Report, June 2012, Ronald Mann, Columbia Law School). Conclusion: The size of your paycheck, financial stability and wealth creation are only loosely correlated. The most important component of your Success Path to wealth is your financial literacy.
As with all of our consulting services, Success Path Consulting uses a Sherpa approach to Wealth Creation. We don’t make the decisions for you, rather we inform you so you are prepared to make good choices. A Wealth Creation Consulting package includes the following topics.
Explanation of the terms:
• market • stocks • mutual funds • actively managed • passively managed • bonds • certificate of deposit (CD) • savings accounts
Strategies for investing:
• emergency savings • short term savings – for this purpose defined as less than 5 years • medium term savings – for this purpose defined as 5 to 10 years • long term savings – for this purpose defined as greater than 10 years • retirement savings • 401K / Roth 401K / 403B • traditional IRA • Roth IRA
Success Path Consulting holds personal accountability and financial responsibility as core values; therefore we believe that financial decision making should not be delegated. We use an evidence based approach in our Wealth Creation Consulting sessions, as opposed to a faith based (AKA just trust us) approach. What is the difference between evidence vs. faith based approaches? We use the lessons of Enron, the mortgage melt-down of 2008, and the lessons of Ponzi schemes to demonstrate the difference.
We also provide an explanation of the common mistakes made by poorly informed investors, such as
- the folly of investing in fad stocks and mutual funds and believing that they will significantly outperform the market
- attempting to time the market
- the dangers of purchasing large quantities of stock in one company, particularly in the company for which you work
And finally, as part of our standard Wealth Creation Consulting package we explain the variety of investment costs and the impacts to you of these costs:
- loads (front end / back end)
- expense ratios
- the advantage of fee only financial planners
At first glance this seems like a long list of complicated topics. The reality is we can provide you with a deeper understanding of everything above in just 3 to 4 hours’ time, and we break the consulting sessions into bite sized pieces so it is both FUN and informative.
Click the link to contact us today to schedule a free initial consultation. The sooner you start your Success Path the sooner you’ll reach your goal. http://www.successpathconsulting.com/getting-started