Take Control of Your Finances

May 11, 2016 General Info

As a young professional, I have found that there are many demands placed on me.  Demands that compete for my precious resources: time and money. What I have discovered is that life is about balance and many of us put off what is not an immediate need. My experience is that there are only a few times a year when people really think about their finances and feel the urge to prepare for the future. April 15th stands out as one of these times as we reconcile with Uncle Sam on our taxes for the previous year.  With all the forms, receipts, mental (and emotional) focus on our cash flow, April lends itself to be a great time to get financially organized and take control of our finances.  I entered the financial industry as a byproduct of taking control of my own finances; what I have learned are that simple, critically analyzed, and time-proven strategies are the only way to make decisions. Here are some of the fundamentals.

15 Rules to Live By:

Protection

  • Protection first – Protection should always be your first financial consideration. Before you build for tomorrow, it is wise to prepare for what might happen today.
  • Full Replacement – The primary role of insurance is to fully replace the item being insured. Example your insurance should allow you to replace the whole house, the entire car, the real ring, and your potential economic value.
  • Lifetime Protection – You should always select insurance strategies that will properly protect you no matter how long you live or own the asset.

 

Assets

  • Savings – Savings and the interest they generate are important.
  • Minimal Risk – Disciplined savings habits help to eliminate the need of taking on excess risk with your money.
  • Tax Advantages – The impact of compounding taxes can be devastating to the performance of your savings and investments.
  • Liquidity – Build an ample supply of short term capital before implementing illiquid products.

 

Liabilities

  • Pay off Short Term Debt as soon as possible.
  • Reduce taxes – Many assets carry an imbedded tax upon sale or liquidation, make sure you are balanced and positioned to minimize taxes today and taxes tomorrow.
  • Mortgage Selection – If your mortgage payment is too high it may be crowding out your ability to protect, save, and build wealth.

 

Cash Flow

  • Increase Gross Income – As a young professional, now, is the time to obtain knowledge and skills that you can use to generate multiple streams of income, or get that raise from your employer.
  • Protect First – The future is uncertain, make sure you are protected from the unknown.
  • Savings – In order to truly absorb life and build wealth save 15% of your gross income.
  • Debt and Taxes – Pay credit cards off each month, minimize taxes, and make sure you can still live a balanced life with your mortgage.
  • Budgeted lifestyle – After protecting properly, saving 15%, and doing what you can to minimize debts and taxes, what’s left can be used on your current lifestyle.

 

Brian Kropp is Co-Chair of the Membership Committee within Ignite Young Professionals.  Brian has been in the financial industry since 2013, and with Pacific Advisors since 2014.  His runaway passions include personal development and taekwondo, in which he holds the rank of 5th degree black belt and is the Regional Chief of Trainee Instruction for the United World Taekwondo Association.

Brian Kropp, CA Insurance License #0I43683, Financial Representative of The Guardian Life Insurance Company of America (Guardian), New York, NY. Pacific Advisors LLC is not an affiliate or subsidiary of Guardian.  Insurance products offered through One Pacific Financial & Insurance Solutions LLC, DBA of Pacific Advisors LLC. Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation.

(2016-19046 Exp 2/2018)

THANK YOU TO OUR SIGNATURE PRESIDENT’S CIRCLE SPONSORS