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If You Have the Time, You Don’t Need the Money

Posted 10:09 PM by

It is important to help people, particularly young people, understand how time is on their side.  Most people have an intellectual understanding that starting to save when they are young is helpful.  I do not think most people (even older people) understand just how much time can help.

How is this?

Which is better, saving $1 for every $10 during financial independence or $15 for every $10?

If you want to achieve financial independence ten years into the future, you need to save $15 each year for every $10 you want to spend each year in the future.

If you want to achieve financial independence forty years into the future, you need to save $1 each year for every $10 you want to spend each year in the future.

To retire at 65, start at 25 and contribute 1/15 of what you have to contribute if you start at 55.  Interest on your contributions provides the rest of the funding for your financial independence.

How do we get there?

On pretty much every financial topic there are differences of opinion.  To make my calculations, I chose these assumptions:

  • Average earnings rate 7%
  • In retirement, you can spend 5% of your nest egg each year to have it last 30 or more years

If we start with a plan to draw $100,000 from our retirement savings in addition to any pension and social security we choose to consider, we need $2,000,000 at retirement.  That represents spending 5% of your retirement savings.

Next we determine how much we have to save annually to accumulate $2,000,000 at 7%.  You would have to save $144,755.01 annually. That translates into $14.48 per $10 of annual income in retirement.  I rounded to $15.

But what if we have 40 years to save the $2,000,000?  Now you would have to save $10,018.28 annually, or $1.00 per $10.

For a second example, we might find someone seeking to draw $30,000 each year.  To generate $30,000 with a 5% rule, we will need to accumulate $600,000.  Over 10 years, our client would have to save $43,426.50 or $14.48 per $10.  Over 40 years, the client would save $3005.48 per year or $1.00 per $10.

Is that a compelling way to talk about saving early?  I would love your feedback.

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How does my website integrate into my marketing plan?

Posted 7:02 AM by

Recently, we have had several inquiries about updating websites.  Comer Consulting is directly involved in the project management and content creation for your website.  We work with other professionals to provide graphic design and technical installation.  We can assemble the team of other professionals or work with your team.  We will also help you create a communication strategy and execute that strategy to keep your website fresh.

Comer Consulting believes that most potential clients do not find their advisors by surfing the internet.  Most potential clients find out about you and go to the internet for validation.  Before they let you know they are considering doing business with you, they want to get a flavor for your work, for your client experience.  Prospective clients want to know:

  • Your background (do you have the experience and expertise I need),
  • Your services (can you help solve my problems) and
  • Your approach (does your style of client experience meet my needs).

Often, a website is also used as a marketing hub.  When you speak with a prospect or client, you want to direct them to the website for more information.  When someone searches your LinkedIn profile, they are directed to your website for more information.  When someone is reading your newsletter and interested in learning more about a topic, they are directed to your website. When someone is interested in reviewing or signing up for your newsletter, they check your website.  

The purpose of marketing is to provide a positive, accurate and authentic picture of your firm. Your website should provide resources that align with the way you serve clients.  Many advisor-focused websites allow clients to research individual securities but many of those advisors encourage clients to invest primarily in mutual funds.  Providing this capability may conflict with the goal of encouraging diversified, long-term investments.  Site content that expands upon your background, your services and your approach should reinforce your client service approach.

Business activity is designed to provide business results.  A website is no different than other business activity in this regard.  Google Analytics, a free service from Google, provides tools to measure the results of your website.  By adding this service to your website you can learn which pages attract the most attention, which initiatives designed to drive traffic to your site are successful and which keywords are being used to find your site.  With data from Google Analytics you can begin to measure some of the results of your website activity. 

Search Engine Optimization (SEO) is a current buzz phrase.  Everyone wants their website to be easy to find and SEO allows your site to be easy to find.  The key variable is the assumption about how prospects are searching for you.  We do not believe very many people initially search for a generic financial planner via the internet.  We believe they search for your firm or your staff based on a referral from a client or center of influence.  Our SEO will focus on high rankings for your firm name and names of the staff.  This is achieved by legitimate web activity for the firm and the staff:  links from professional organizations, quotes and mentions in articles and social media, updated content on the website that prospects and clients want to read, etc.  Once we have data from Google Analytics, we can begin to incorporate other keywords into the SEO mix. 

With your basic website in place, future enhancements could include postings that address your unique processes for working with clients, postings that help prospects and clients understand how to address their issues, updating newsletter content as it is created, providing a brochure for download and leveraging content created for other uses.  As a follow on project, you should consider assigning someone to update the website, establish standards for timing and develop a communication plan to guide these enhancements.  These are the activities that will keep your website fresh and help you remain high in search rankings.

Websites are important elements in the marketing mix.  In the mind of many of your potential clients, you do not exist if you are not on the internet.  If you are on the internet but do not accurately portray your business, you will lose business from prospects that are looking for a firm just like yours.

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