Independent Wealth: The Trap at Third Base

Third base is a special place in the wealth game. Once you’ve reached third base, more than likely, you have achieved each of your financial goals. So, there’s nothing more to do besides kick back and enjoy the spoils of your hard work… Right? Not so fast! Although many people do just that, once they’ve achieved a level of independent wealth, the journey isn’t complete until you’ve rounded all of the bases and made it safely home. In today’s entry, I’m going to look at what third base looks like and how you can begin your final sprint towards home plate.

Follow Along With The Financially Simple Podcast!

• What reaching third base feels like and why you can’t stay there
• The Rule of 4%
• The value of having financial advisors at third base
• Why money shouldn’t be the focus of the Wealth Game
• “The Sandcastle Effect” and how to avoid it

Independent Wealth – What Third Base Feels Like

Recently, I saw a video of a tee-ball player who had hit a triple. As he was rounding the bases, this little boy was dancing and slapping high-fives with his base coaches. He was so excited and having such a good time, knowing that everyone was watching and cheering him on. Similarly, when you finally make it to third base in the wealth game, it’s an exciting time. It feels good. You might even be strutting around doing the chicken dance like the little boy in the tee-ball video. And you should be excited.

At this point, your retirement is fully funded. You’re in a small club of people who can say that. In fact, the Federal Reserve states that just 36% of Americans feel their retirement savings are on track. Likewise, you’ve probably achieved independent wealth through assets that produce enough income to cover your current lifestyle. Now, this looks different for each person, but following the 4% rule, having $1MM in assets will yield $40K in passive income. So, if you’ve reached third base, let me be the first to congratulate you! I know the amount of effort that it takes to reach this point. Great job!

The Value of Having a Coach to Guide You

In addition to having fully funded retirement and income-producing assets, you probably have an advisor to coach you through the wealth game. They’ve helped you on the road to independent wealth. According to a study by Northwestern Mutual, 66% of people who work with a financial advisor reported feeling very financially secure. This is in stark contrast to just 31% who aren’t working with an advisor. Unlike some, you see the value of having a coach to guide you, cheer you on, and keep you accountable. You’ve followed their guidance and now you’re reaping the rewards.

If you’re reading this and you don’t have an advisor, let me just tell you that getting to third base is hard enough. Trying to do it without a trusted advisor is nearly impossible. But why? If you’re already saving and investing why should you pay someone to tell you to save and invest? Well, a financial advisor does more than simply tell you what you should do with your money. They educate you, create customized plans designed to help you achieve your goals as quickly as possible, and hold you accountable to those goals.

Adding weight to this is a 2019 study from Vanguard. In this study, they found that working with an advisor could increase returns by 3%. With a $100,000 initial investment over a 30-year period, that’s a difference of about half a million dollars. Additionally, only 30% of Americans without an advisor say they have financial plans built to endure market ups and downs, compared to 73% of those who do have an advisor. So, you can see that having an advisor or coach to guide you provides tangible results on your independent wealth journey.

Don’t Stop Now!

I’ve seen so many people who reach third base and simply quit. Everything they did to get them to third base, the planning, scaling of investments, saving, etc., just went out the window. But that’s not what the wealth game is about. If you become satisfied with the money, the money will go away. Once you arrive on third, you have to lean into your team of advisors. Follow their lead so you can turn toward home plate and use the wealth you’ve built to create generational wealth and to help others.

In addition to your financial advisor, you should be working with a forward-thinking CPA. By taking advantage of various tax shelters and strategies, your CPA could help you to accumulate even more wealth that you and your financial planner could put to work, laying the foundation for generational wealth creation. Folks, there’s a reason that I (a CERTIFIED FINANCIAL PLANNER™) have financial advisors. They can be objective when it comes to my money. My advisory team keeps me from getting in my own way so I can reach my financial goals. 

Running home requires education, planning, and duplicity. Working with your advisors could help you to acquire other revenue streams to propel you toward home. Friends, if you’re reaching third base, now’s the time to begin a plan to develop what you’ve been working so hard for. Get with your advisors to devise a plan to make your wealth last so you can share it and bless others. That’s what the wealth game is all about. 

Wrapping Up…

Look, if you don’t have a trusted advisory team, reach out to us. We have highly-qualified advisors across the nation that can help you work toward your goals. I know life is hard and getting to third base can feel like an exercise in futility. But life is good and reaching independent wealth doesn’t have to be frustrating. By keeping your eyes on the goal and following the advice of your financial planner, you can make reaching third base, at least, financially simple. Let’s go out and make it a great day!

Are you approaching third base without a team to guide you home? Reach out to us. We’ve got trusted advisors all across the nation who are here to help you win the wealth game.