Better Financial Health in 15 Minutes (or less!)
If you are the type of person who wants to start getting your finances in order but don't exactly know where to start, or maybe you just aren't all that interested in finance, this is the podcast for you! Stacey Hyde covers many different topics under the umbrella of basic, need-to-know financial planning information, but simplifies it in a way for everyone to understand. Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis TN 38137. (901) 422-7526, This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.
Better Financial Health in 15 Minutes (or less!)
The Power of 1%: Tiny Money Moves That Compound Big
Forget waiting for the perfect financial opportunity. Everyone dreams of having bought Apple stock in 2004 or finding that perfect house at the perfect price, but real wealth isn't built through home runs – it's created through consistent singles.
After working with hundreds of millionaire-next-door retirees, I've discovered their secret isn't spectacular investing wins but small, incremental improvements that compound dramatically over time. This power of 1% works universally, whether you're just starting your career or already enjoying retirement.
For younger investors, increasing your 401k contribution by just 1% creates minimal budget impact now but massive retirement benefits later. On a $60,000 salary, that's only $50 monthly that could grow to $50-60k by retirement. Already maxing retirement accounts? Consider canceling one streaming service ($10-15/month) and redirecting those funds to a Roth IRA. Another overlooked opportunity: move your emergency fund from a traditional bank to a brokerage firm's money market account earning 4%+ interest – potentially generating hundreds in passive income annually from money that was sitting idle.
Retirees benefit equally from the 1% approach. Reducing portfolio withdrawals by just 1% keeps more money invested and growing. Those 70½ or older can optimize charitable giving through Qualified Charitable Distributions directly from IRAs, maintaining generosity while eliminating taxes on those distributions.
Think of financial wellness like physical fitness – consistency trumps intensity. What will your 1% improvement be this month? That single small step might just transform your financial future. The journey to financial freedom isn't about swinging for the fences – it's about showing up daily and moving consistently in the right direction.
Envision Financial Planning. 5100 Poplar Avenue, Suite 2428, Memphis, TN 38137. (901) 422-7526. This communication is strictly intended for individuals residing in the United States. Advisory Services offered through Envision Financial Planning, a Registered Investment Adviser.
Hi, I'm Stacey and I'm back for another episode of Better Financial Health in 15 minutes or less, and what I want to talk about today is 1% how to nudge your finances along by making sort of small moves that just move you in the right direction. Oftentimes, we think that we need to get everything perfect. We need the home run. We should have bought NVIDIA three years ago. We should have bought Apple in 2004. And we're looking for the perfect house at the perfect price or the perfect job. What we really need to be thinking about, and what we have discovered in working with hundreds upon hundreds of retirees, is that these millionaire next doors have built their wealth not by swinging for the fences, but by doing the little things along the way. Or, to use a baseball term, they've hit a lot of singles, they haven't hit a lot of home runs, but just over time, that's compounded, and compound interest is a powerful, powerful tool, and so what I wanna do is talk about how that can work for you, whether you're in your 20s and 30s and you're just starting out, or if you're already retired, how you can use the power of 1% to really help you. So, for our younger listeners, the thing I would encourage you to do is, if you have a 401k or a 403b available to you, increase your savings rate by 1%. So if you make $60,000 a year, that is an extra $600 a year, $50 a month and over time that could lead to that $600 in a year could lead to 50 or $60,000 by the time you hit retirement. So it's not a big change coming out of your pocket. It's certainly not going to break you. But that little change can have a big impact. What if you don't have a 401k? Or you're like, okay, I've already saved. You know I'm already at 15% in my 401k. Well then, consider maybe canceling one subscription service and taking that savings say $10 a month and putting that into a Roth IRA. So that's $120 a year. That also is going to build over time and build you a tax-free bucket. So these are some small things that you can do that will really have outside benefits for you down the road.
Speaker 1:The other thing that you can do is if you've got a savings account at the bank or you're carrying more than $5,000 in your checking account, I'd really encourage you to look at either a high yield savings or a money market account not at the bank, because a money market account at a bank is not really a money market fund but a money market account at a large brokerage firm such as Fidelity or Vanguard or Charles Schwab. Those are going to earn you over four percent% and over time that's sort of free money that you picked up and earned on money that was just sitting there waiting for a rainy day anyway. And so if you've got, if you look at that and you say, okay, I was earning nothing on that money, on that $10,000, but now I'm earning $400 a year, well, that can go a long way toward offsetting the cost of a vacation or even making one of your car payments for you. So those are some little changes you can make there that can have outsized benefits to you longer term. What if you're already retired? You can also apply the 1% rule. That's, for example, if you're pulling out $60,000 out of your portfolio a year to live on, if you reduce that by 1%, that's $600. That's going to stay in there and grow over time and potentially make it easier for you down the road when a big expense comes up, because that's there.
Speaker 1:The other thing that you can do is to be a little tax smarter. If you're making charitable contributions and you're 70 and a half or older and you have money in a pre-tax IRA, you can pull that money out from the IRA. The check has to be made payable to the charity, but that money comes out of your IRA. You never pay tax on that money. It goes directly to the charity and they get full benefit from it. They don't pay tax on that money because they're a charitable organization. That's called a qualified charitable distribution. So that's something that you can do. You're still making the same charitable contributions, but instead of pulling it out. Still making the same charitable contributions but instead of pulling it out and, since the standard deduction is so high, not getting any tax benefits for your giving.
Speaker 1:If you do do it through your IRA, you can't do it if your money's in a 401k. It has to be an IRA to be able to do this. That's another way you can do it. The savings account thing and interest earnings also applies to you if you're retired. So that's also something that you can do, because what we're really trying to do is to just focus on that small changes that we can do better. It's the same way that we get in better shape we start going to a class and we just show up every day and then all of a sudden they're close, but a little bit better. So those are some small things that you can do that will enhance your overall financial wellness over time. You don't have to hit a home run, just make one small step. So I challenge you what is going to be the 1% thing you try to do this week or this month to enhance your financial wellness? Thanks for tuning in. This has been another episode of Better Financial Health in 15 minutes or less.