I have spent a lot of time over the past year thinking about what a financial advisor is supposed to do for someone my age.
Most people I know are pretty capable with money. They have good jobs, their 401(k) is starting to get some substance to it, they're building liquid savings, maybe they've bought a house or are planning to. They're checking the boxes they were told to check.
A year ago, that would have been about the end of the conversation for me, because I was checking those same boxes.
I had a good job, strong equity in my home, and was helping Polly plan our wedding. The financial questions coming my way were relatively simple, and because the answers were simple, they felt easy.
Then, in October of last year, I was let go from my job without notice or severance and suddenly found myself facing a lot of uncertainty about my future.
Almost overnight, the volume and complexity of the financial decisions
I had to make grew exponentially.
I went from simply making sure my mortgage payment went through each month to weighing the cost of a late payment against the interest I'd pay by putting that expense on credit. I was suddenly thinking about loans, HELOCs, hardship programs, unemployment, wedding expenses, rolling over an old 401(k), health insurance, life insurance, combining finances, and finding a new job, all at once.
It was a pretty stressful introduction to just how complicated personal finances can become.
Your story may not be as dramatic or sudden as losing a job in the middle of planning a wedding. Hopefully it isn't. But at some point, the questions will start coming faster, and the answers will become more complicated.
The funny thing is that the simple questions never really go away, either.
Rent may turn into a mortgage payment. Student loans may eventually turn into college contributions for your kids. Saving for yourself becomes saving for a family. A single employer retirement account can become multiple accounts across several jobs. One insurance policy becomes several. Before you realize it, the roughly ten financial questions you were trying to answer when you left school have multiplied into what feels like a part-time job of their own.
This is where I think people start to struggle.
Not because they're bad with money. In many cases, quite the opposite.
It's because their financial lives have become complicated enough to need real planning, but they may not yet have enough accumulated wealth to fit the traditional model of wealth management, where an advisor is primarily focused on managing a large investment account.
That's the gap I want to help fill.
I don't think you should have to wait until you have a quarter million dollars invested to gain access to the level of understanding that comes from working in this stuff every day, or to have someone you can call when you're making an important financial decision.
That's really what I want this newsletter to be.
Each month, we're going to share some of the things we're seeing and thinking about in our work at BWAG that we believe could be useful to you and your family, either today or somewhere down the road.
Some issues will be more technical and fact-based, like an IRS rule change that could affect you or a new planning opportunity worth knowing about.
Some will break down common financial and tax decisions through real-world examples, such as the long-term differences between Roth and traditional retirement contributions.
And some will be more observational: the behavioral side of money, the mistakes I see people make, or lessons I've learned from making some of those mistakes myself.
The goal isn't to turn you into a financial expert. It's much simpler than that.
I want to help you recognize the financial questions worth asking, understand the decisions in front of you, and know that you have someone to call when you're not sure where to start.
So, that's the idea behind this.
Consider it a monthly note from us at BWAG with a few things we think are worth knowing about money, taxes, investing, and everything that comes with them.
And if something you read here makes you think, “Wait, I wonder how this applies to me,” give me a call.
That's what I'm here for.