Have a college degree and a decent career but still broke? Financial guru Gwendolyn V. Kirkland, CFP®, believes daily deposits of wisdom, discipline and patience are key to getting yourself out of a financial rut. An iron-clad financial strategy doesn’t hurt either, said Kirkland, who’s contributed financial advice to Essence, N’Digo, The Chatham Citizen, Money Magazine, Black Enterprise, Ebony, and The Bulletin. The financial powerhouse’s blueprint for banking sizeable success includes the following four steps:
1. Develop a realistic, air-tight financial strategy If you are a young professional, your first priority should be to reduce and eliminate debt. To do so effectively, you will need to devise a financial plan that includes a practical budget, risk management assessment and evidence of spending boundaries. It is important for you to determine early on the differences between your needs and wants. Unfortunately, too many people graduate from college and immediately seek a life of luxury that often leads to financial despair. A wise, young professional would instead be patient and focus on paying off any student loans, paying bills on time, establishing cash reserves and obtaining an exceptional credit score. He or she would also use credit cards judicially, as they were never really instituted to be an extension of a pay check, but for an emergency. I often warn my clients to be careful with the use of debit cards, too, as it is easy to lose track of expenditures. Debit cards can sometimes become an overspending trap for people who become dependent upon a checking account’s overdraft protection. I encourage you to implement the 10-10-10-70 plan. I believe the first ten percent of your income isn’t really yours.
I believe it should be donated to your favorite charitable organization or a cause you strongly believe in. It should be used to help enhance someone else’s life. For example, I am a tithing Christian. Therefore, my first ten percent goes to the place where I am fed spiritually. I place another ten percent into a short-term savings account. An additional ten percent is deposited into an investment account for the longer term, and I then strive to live off of 70 percent of my income. 2. Be Proactive One sure way to build wealth is to become proactive and remain informed. You should always take advantage of every opportunity to advance within your field by attending seminars, subscribing to various publications, watching television programs and listening to radio shows that provide information that can be applied to your career. However, please don’t become a serial seminary attendee who never implements any of the ideas or tips he or she has acquired from the conferences. 3. Take Full Advantage of Employee & Retirement Benefits Many young professionals are fortunate enough to be employed by corporations. For those of you who are entering into a corporate setting, you certainly want to take advantage of the retirement plan and other group benefits. I always advise my clients to contribute the maximum amount to their company’s 401(k) or 403 (b) plans. Even if it seems difficult, don’t forgo it totally. Make an effort to contribute at some level with the idea that you will increase the amount as time goes on. Even for those of you who are entrepreneurial, you can put some money in an IRA. You can systematically deposit funds monthly, so you don’t have to come up with a big lump sum before you file your taxes. As a young professional, one of your top priorities should be to attain adequate short- and long- term disability insurance, as well as life insurance through your employer or an independent agency, especially if you have a family to support. The likelihood of someone becoming disabled prior to age 65 is greater than death. If a couple is living a lifestyle that’s dependent on two incomes and loses one, that could be fatal because now you are facing economic hardship. With various insurances in place, if your partner becomes ill, your family will have that disability insurance to fall back on. If your partner passes away, their life insurance proceeds would be available to provide financial assistance in your family’s time of distress. Last, but not least, a successful financial strategy isn’t complete unless it encompasses details of estate planning. Estate planning spells out the distribution of your assets to your intended beneficiaries should you die or become incapacitated, thwarting lengthy litigations. Estate planning includes your Will, trusts and durable powers of attorney for health care. I strongly recommend a durable power of attorney for health care. Seek Advice from an estate attorney as everyone's situation is different—just think Terri Schiavo, whose sensational fight for life case recently played itself out in the media and the courts as a captivated nation looked on and chose sides. A durable power of attorney for health care can ease the burdens of your spouse, children and other family members, and alleviate lengthy debates if you are unable to make medical decisions for yourself. Your family won’t have the worries of not knowing your preferences when it comes to resuscitation, life support, donation of organs and other medical issues. 4. Your First Deposit Finally, remember success in anything doesn’t come overnight. When it comes to building wealth, the term “building” is key. Acquiring wealth is not an immediate thing. The building process is not like a manufactured house where you just bring the layout of the size and then place it on a foundation. The process takes time and a solid foundation has to be laid. This interview obtained by chinika.com may not be published, broadcast, rewritten or redistributed without the prior written authority of Chinika, LLC .
Trackback(0)
 |
Economic Success for Young Professionals
TrackBack URI for this entry
Subscribe to this comment's feed