The fact that people pay me to be their financial planning coach is one of my greatest professional accomplishments. People trust me to guide them through their financial life, and that means they trust me to advise them on their future and their family’s future. It’s a big responsibility and one that I take very seriously.
I didn’t get there overnight. I’ve made my share of mistakes, and I’ve also had my fair share of wins. It’s the ability to look back, to learn from the past, and extrapolate about the future that makes a great investor, so I’m grateful for my missteps as well as my successes.
In my opinion, the key factor to your financial success is your will. If you want to build wealth, if you want to put your money to work for you instead of the other way around, you will find a way. In that equation, a financial planning coach is a critical factor.
If you listen to the advice of your life coach financial advisor but don’t heed it, if you always think you’re right, you can make the choice to go it alone. But I can give you this piece of advice after building multiple seven and eight figure businesses: If I’d listened more closely to those who came before me 25 years ago, my wealth would be even greater than it is now. That’s why I believe that a financial life coach should be a part of the strategy of anyone who genuinely wants to build true wealth.
Financial Literacy Coach Terms
As a financial literacy coach, I like to define my terms so I know that I am on the same page as my clients. Some of the following may seem obvious to you, but even a slight difference in terms can result in big misunderstandings.
Asset: An asset is anything you own or control that has value. Cash, stock, real estate, investments, intellectual property, and any other tangible or intangible possession can be considered an asset.
Capital gains: A capital gain is the difference in the price of an asset between the original purchase price and the increase in value when it is sold. If you buy a home for $100,000 and sell it later for $200,000, the amount of the capital gain is $100,000. Selling at less than the original purchase price would result in a capital loss.
Credit: Credit is simply money that is borrowed and paid back with interest. Most homes, cars, and other big ticket items are purchased by leveraging credit.
Creditworthiness: A lender’s faith in the borrower’s ability to repay a loan is referred to as creditworthiness. A borrower’s previous financial history is reflected in their credit score, a number between 300 and 850 that fluctuates based on the borrower’s ongoing payment history and decisions.
Default: Default follows delinquency, or late payments. A loan is in default when the borrower has failed to meet multiple payment obligations. During the default stage, credit bureaus are notified and the lender’s credit score will be affected.
Diversification: Diversification is a strategy that consists of dividing resources among multiple investments so as to mitigate risk.
Interest: A lender charges interest as a percentage of the loan principal when lending to borrowers. Simple interest is charged only on the amount borrowed. Compound interest is the interest that an investor earns on interest. The frequency of the compounding, or when the principal sum renews, will determine how much additional money will be made by the investor.
Principal: This word has two relevant meanings. If you borrow $20,000 to buy a car, that sum is the principal; the amount of the loan will also include interest. Investments have a principal amount as well. If you invested $20,000 in a property ten years ago and you wind up selling it for $100,000, $20,000 is the principal amount invested.
Time Value of Money (TVM): Here’s an important term that cuts straight to the heart of the Indestructible Wealth Method. Because money can—and should—always be grown via investing, the $1,000 that you have now by definition will always be more valuable than the $1,000 you will receive next month or next year. The time value of money can be calculated by taking into account the principal sum, its future value, and the interest that can be made on it between now and that time in the future.
The Top 10 Truths from a Professional Financial Literacy Coach
Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are. – James W. Frick
Money has a strange way of cutting straight to the truth. If you say you want to become an investor and learn how to make your money work for you, but instead you tie up your resources in an extravagant home or a car loan you can’t afford, as your financial life coach, I will ask you to reassess your belief system and your priorities.
Money is a means to an end. It provides safety and security for your family; it gives you the time to spend with your kids to teach them the values that you want them to have. It’s a resource to fall back on in case you or someone you love gets ill. It allows you to pursue the things in life that really matter to you, whether that’s a hobby, running your own business, or traveling the world.
If you’re going to employ me as your financial coach, do us both a favor: make sure that becoming financially literate is a priority for you. If you’d rather drive an impressive car, that’s your choice—I might not agree with you, but it’s still your choice. If you want to drive that car ten years from now when you’re on solid financial ground—and in addition, own real estate, crypto, and a portfolio of investments that works for you—hit me up.
Pay Yourself First
Do not save what is left after spending, but spend what is left after saving.—Warren Buffet
One of my top priorities as a financial planning coach is to create the habit in you to pay yourself first. Don’t pay your favorite restaurant. Or your favorite massage therapist. Or your favorite clothing store. Pay yourself.
That means that you’re going to reserve a certain amount of money every month to distribute to your investments. Whether those are crypto, real estate, stocks, or whatever you decide is best for you and your situation, you must make your money, however much you have, work for you.
It might not seem like it at first glance, but when you pay yourself first, you are putting yourself first. The right financial advisor life coach can help you to realize this and, more important, act on it.
Create a Budget—and Stick to It
If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed. – Edmund Burke
You’ve heard it a million times. And yet, it’s one of the most difficult pieces of financial wisdom to follow. Indeed, a major reason that people seek out a financial coach is so that they will be accountable to their budget.
You can see a budget as a limitation, or you can see it as something that sets you free. It’s all a matter of perspective.
I choose the latter perspective, and I follow a budget to this day. It’s not something that you give up once you “attain wealth,” whatever that means. With the Indestructible Wealth method we are always creating wealth. While my budget has gotten bigger and bigger as I’ve gotten older and I have more money to spend on things I want, no one has unlimited money. The discipline of sticking to a budget is perhaps the most important factor in building Indestructible Wealth.
Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like. – Will Rogers
Read that again. And then ask yourself: Is that who I want to be?
Without goals, you can easily wind up in that trap. Using money to feed your ego will take you down, and it should. Money is energy. If you use it for frivolous things, you may well end up with a frivolous life.
When you spend money, you should be aware that you’ve given up a part of your life in order to get that money. You’ve spent your time, and time is something you can never get back.
Setting goals is one of the most important things I do with my financial coaching clients. Once we know why they do what they do, we work backwards from there to create an investing strategy that ruthlessly supports those goals.
Plan for Later, Enjoy Now
Our mission here at Indestructible Wealth is to help you leverage your resources to live and enjoy the now, while building an ever increasing, well strategized, bulletproof future. We won’t risk our current lifestyle for a better one. Ever. —Jack Gibson
What kind of a financial coach would I be if I didn’t quote myself somewhere in this article!
I want to get you away from the idea of “saving for retirement.” Permanently. Why should you ever stop earning money? Putting yourself in the position to earn more and more passive income as the years go by is one of the main tenets of my financial planning coach curriculum. It’s practically a mantra.
You should never be satisfied with trading time for dollars. Never. Because you can never get that time back. So when you get paid, you need to always be thinking about how you can multiply that money exponentially. You will never build wealth if the money that hits your checking account every week or every month is spent rather than invested. The more money you put now towards intelligent investments, the more that your time will be your own in the future.
At the same time, I teach my students to enjoy their resources now. Investing in yourself will always pay dividends later. In fact, doing what you love is an investment. You never know how the skills you develop now will serve your financial health in the future. When you treat everything as a learning opportunity, you are, by definition, building wealth.
Never Expect to Get Something for Nothing
Opportunity is missed by most people because it is dressed in overalls and looks like work. – Thomas Edison
You’ve probably heard this before: If getting in shape were easy, everyone would do it. Building wealth is exactly the same. None of my financial coach clients got to the point they’re at now by guessing willy nilly, making bets, or hoping for the best. Everyone who works with me works hard, and they’re building wealth one brick at a time.
There’s always some luck needed here and there in investing, as there is in life. But you make your own luck by being informed, pushing yourself to grow, and making sacrifices.
Don’t fool yourself: If building wealth were easy, everyone would be doing it.
Differentiate Between Needs and Wants
Frugality includes all the other virtues. –Cicero
I agree with Cicero on this one—at least, up to a point. You should always be enjoying your life—otherwise, why are you here? But the truth is that frugality allows you to prioritize and enjoy the things that really matter.
By definition, when you are frugal, you are serious about valuing your time. Let me give you an example. Let’s say that you love to ski. Well, skiing is not an inexpensive hobby. It’s also not the most convenient hobby, unless you happen to live in the mountains. But regardless, you really love to ski.
You need to budget your time and money in order to take part in this hobby. You need to prioritize this thing that you love. Ski equipment is pricey. So is a ski pass. But because you love it, you budget both time and money to devote to skiing.
Is this frugality? In my opinion, yes, despite the expenses inherent in the sport. But because you’ve made it a priority, you are frugal in other ways. You make sacrifices so that you can partake in something you love.
Now, apply this principle to your finances and investment strategies. In order to set up your future so that your money works for you more and more as each year goes by, you’ve got to be frugal in some parts of your life. By definition, you will be diverting some resources from things you might rather have or experience in the moment so that you can control your money rather than the other way around.
Anything can be a “need,” something that you prioritize, however frivolous it may look to an outsider. A good financial planning coach will help you to distinguish needs from wants.
We make a living by what we get, but we make a life by what we give. —Winston Churchill
Here’s a truth that I’ve found in my life, and I’ll admit that it took some time. I’ve realized that making money is nothing without giving money. I wasn’t always as generous with my giving as I am now, but finding the right church and spiritual community taught me so much about sharing my resources and how much it affects my life to do so regularly and generously.
It’s a truth that you will always get back what you give in spades. But there’s a caveat: you have to give without the expectation of this happening. The way you get it back, the way energy comes back to you, may be unexpected or take time, but the spiritual math here never fails. You will always get back that which you give freely.
At some points in your life, you may be more able to give your time than your money. That’s OK. Your time is a resource, and if you have more time than money, by all means, volunteer your time. The only requirement here is that you give.
Build Generational Wealth
It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for. – Robert Kiyosaki
In our day and age of instant gratification, thinking about the future, even a future that does not include oneself, is not always top of mind. But have you considered that it should be?
Planning for your family’s future security not only protects your children, but possibly even your grandchildren and beyond. Thinking of your legacy grounds your decisions now, gives you a sense of purpose, and helps to eliminate frivolous spending and wild investment decisions.
As your financial life coach, I can help you to get clear on the moves that will help you build generational wealth. Paying off debt, contributing more to your 401(k), saving for college, and creating a trust are all ways that I can advise you on how to keep more of your money in the family.
Many people fail to involve their families in estate planning. They don’t want to burden others with thoughts of them after they are gone. Confronting this issue together, however, empowers your heirs and gets that 500-pound elephant out of the room. Knowledge is power, so don’t keep your family members in the dark.
Look to Where the Puck is Going
I skate to where the puck is going to be, not where it has been. —Wayne Gretzky
Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing. – JP Getty
I’d say this one deserves two quotes!
Being able to spot trends is a matter of study, and you won’t get good at it overnight (unless you’re some kind of prodigy, and in that case, you don’t need a financial coach).
Think of any skill you’ve honed over your lifetime. Investing is no different. If you expect to get good at investing in a month or a year, you are going to be disappointed.
Like any skill, investing has a process behind it. It has rules. Intuition, luck, process, and hard work are all part of learning to become a good investor. The right financial literacy coach can help.
As your skill increases, you will start to understand not only your chosen fields of investing, but you will become more aware of the world around you. Investing is as much about understanding human nature as it is about understanding the mechanics of real estate or stocks or crypto.
You should be trying to understand trends every single day as an investor. If you do this, I promise you, you will begin to spot them over time.
Enlist a Financial Planning Coach
I hope I’ve given you some food for thought with this article. Time tested wisdom does not change just because investment vehicles change. Twenty years ago, we wouldn’t have even understood the concept of crypto let alone be talking about investing in it, but the principles of investing don’t change.
The purpose of a life coach financial advisor is to support you in creating the life you want for yourself and your family, now and long into the future. Perspective is not always easy to come by, especially when you need it most.
If you’ve made it this far, you are more than likely sincerely looking for a financial coach who can help you go nuclear with your investments. I get it. I’m like you—always learning, always shooting for greater things while enjoying and being grateful for the things I have.
Growing wealth hinges on getting the right advice. You are always responsible for walking your own path, but the right financial coach can help you get there faster and smarter.
Book a call today. I’m ready to be your partner in building Indestructible Wealth for you and your family.