Page 35 - The Informed Fed--Hearn (edited 10.29.20)

them to comprehend. Financial planning for the future when a person is
in their early 20’s can be very short sighted. Ten years seems like forever
and 20 or more seems like an eternity. They can look back on that time
in their later years and it seems like it was yesterday. My how time flies!
Most 20-year-olds are focused on establishing themselves in their
career and raising a family. Retirement seems like a foreign land that will
be ready when they get there. When we start to develop their plan that
may project 30 or 40 years into the future, it becomes clear to most of
them that small decisions can greatly impact their financial future. They
soon realize that something as simple as a ROTH IRA program with a
$50 per pay period contribution will grow to an amount that seems
inconceivable. Soon they learn about the time value of money. Your
bank loan officer and the IRS are very familiar with the time value of
money—are you? Many times, we will get a call a few months after the
initial consultation and the new client will increase their contribution. We
have heard many times: “You know, I thought that $50 per pay period
was going to be a stretch, but I don’t even miss it. Let’s go ahead and
increase it.”
We love it when a plan comes together! Since we set this client up
with a ROTH program that has no stock market risk and layers of
guarantees and protection, they know it will never lose value. This client
will benefit from the miracle of compound interest, day by day, week by
week, and year by year. The money is working for the client. Rate of
return never sleeps! Based upon incremental increases in contribution
over time; this client will have a substantial nest egg for retirement.
Happy is the man that finds wisdom and gains understanding! Wisdom
is more valuable than gold. Benjamin Franklin, whom we quoted earlier,
also said that an investment in knowledge always pays great dividends.
Many people have the misconception that wisdom is for the super
intellectual or the person with a long list of degrees or letters behind their
name. But the fact is, wisdom is little more than the experiences we learn
from putting the positives to work in our own lives, and to those whom

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