Are You a "5 Tool Player" With Money?
As a high school baseball player, I always looked up to major leaguers called 5 tool players, those who excelled in all 5 major areas of the game: hitting for power, hitting for average, throwing, fielding, and base running. 5 tool players are rare and exciting to watch. Do you remember "A-Rod"? Alex Rodriguez's career highs were stunning: a .356 average, 57 home runs and 46 stolen bases. He also won two Gold Gloves as a shortstop.
As a young professional working in wealth management, I'm striving to be a 5 tool player when it comes to the 5 components of success with money: Financial Education, Budgeting, Saving, Investing, and Health. The good news, it's not too hard to excel in all 5 areas. It's certainly easier than baseball! Here's how to get started.
Financial Education - Being financially literate will allow you to address common money-related questions that come your way, such as how much rent you can afford, or if buying a condo makes sense. Where to begin? A good place is our recent webinar: The Top 10 Questions Young Adults Ask Us About Money.
Budgeting - The key to financial success is living within your means, and that starts with creating a budget. Having a spending plan in place provides confidence and clarity. Budgeting doesn't have to be a drag... here's how to have some fun with budgets.
Saving - Life can get tricky. Unexpected expenses can pop out of nowhere. You may find yourself in between jobs. That's why a rainy-day emergency fund is crucial. Start saving with each paycheck, with the goal of setting aside six months of expenses in a money market fund.
Investing - The best time to begin investing for retirement? Right now! As young professionals, time is on our side. Try to contribute as much as possible to your retirement plan, at least as much as needed to get your company's "match", if available. A terrific investment option for your 401(k) is a target date fund — an “all in one” diversified fund that is designed to manage risk over time.
Health / Lifestyle - Your health is your most valuable asset. A health club membership isn’t an extravagance if you use it — it's an investment in your continued wellness. Investing in your health will allow you to be the best possible version of yourself on your path to success!
My "glory days" in baseball may be in the past, but I'm still on the road to being a 5 tool player!
Sean is a Client Service Associate at Rappaport Reiches Capital Management. He is dedicated to providing quality service and support to our clients. Please connect with Sean below. He loves to talk about investing, financial planning and sports!
The author does not intend to provide investment, legal or tax advice as these materials are for general educational purposes only. Please consult your legal, tax or investment professional for advice on your particular situation. This material is derived from sources believed to be reliable, but its accuracy and the opinions based thereon are not guaranteed. It is not intended to be a solicitation, offer or recommendation to acquire or dispose of any investment or to engage in any other transaction. Investing involves risk including the possible loss of principal. Past performance does not guarantee future results. Please refer to RRCM’s Form ADV Part 2 for additional disclosures regarding RRCM and its practices.