What Does Financial Security Mean To You?
We all work hard, day in and day out. But have you stopped to consider why you are working so tirelessly? Is it just to pay the bills, put aside a bit for the future, go fishing every so often, and call it a day? Most of us just want to have “enough.” Enough to do what we want, live where we want, and work only as much as we want. But what is your “enough”? What does financial security look like to you?
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What Is Financial Security?
The term “financial security” has such a nice ring to it. It evokes images of freedom, independence, leisure, and opportunity. Financial security is defined as having sufficient personal resources to live without needing to work to cover the basics. It means you have the time and resources to pursue fulfillment in your life. If you have financial freedom, you can focus on living your life rather than making a living.
A recent Retirement Confidence Survey tells us that only 21% of workers are very confident about having enough money for a comfortable retirement. Globally, HSBC reports that retirement is not the main savings priority for 85% of working people and that 29% of retirees who did not prepare adequately for a comfortable retirement were not aware of how much they needed to save.
Why have so few of us taken the time to calculate our how much we need to attain financial security? Are we unaware of the consequences? Are we too busy with our daily responsibilities? Or do we fear that our number will be out of our reach and want to avoid the discouragement that may come?
The exciting reality is that financial security may be closer than you think! But without working to define your personal freedom number, it’s impossible to make progress towards it. We encourage you to take a few minutes today to calculate your financial security number.
What Is Your Financial Security Number?
There’s no need to overcomplicate the calculation or do extensive scenario planning when it comes to figuring out what you will need to be financially secure. The basic rule of thumb to obtain your financial security amount is that you will require about 20 times your current living expenses, assuming a 5% rate of return, to maintain your current lifestyle.
First, you need to have a realistic perspective of how much money you need to keep living as you are presently. Your lifestyle expenses include everything you incur monthly. Let’s say, after adding up the costs of housing, basic living expenses, education, taxes, etc., you come to the sum of $4,000. Multiply that number by 12 and your annual cost of living is $48,000. Twenty times that amount is $960,000. That is a rough estimate of your financial freedom number. Don’t let that number scare you. With a bit of planning, you can get there!
Keep in mind that this is a number and nothing more. There are a lot of variables at play, including how you invest, your lifestyle needs, and any unexpected emergencies.
For example, you might live a modest lifestyle and would not need as much to be financially secure. Or, you may fall ill and suddenly require significantly more resources for housing or medical care. Determining your financial security number simply gives you a target to aim for.
What number did you come up with? Is it more or less than you expected?
What Next?
Just like with fishing, guesswork won’t get you far. So once we’ve calculated your financial freedom number, we’ll need to create a game plan to obtain it. Through our discovery process, we work together with our clients to identify their number and design a plan for how to reach that goal. Often, our clients are thrilled when they realize there are options available to achieve financial security in less time than they expected.
Once we find your number, we keep it at the forefront of our planning and come up with different strategies to get there. If the goal of your life’s work is to reach complete financial freedom, this process will help you identify the shortest path between where you are now and where you want to go. Finding balance in your life may be closer than you ever thought possible. Give me a call at 949-481-1807 or email This email address is being protected from spambots. You need JavaScript enabled to view it. to take the first step towards a financially secure future.
Meet Rick
Over a 25-year career in financial services, Rick has helped hundreds of business and personal clients meet their investment goals by developing risk-efficient portfolio management strategies. He holds degrees in Economics and Psychology from the University of California, Irvine.
The water is Rick's second home: He and his family have been fishing Southern California and Baja going on four generations. In the 1940s, his grandmother worked at the Cannery Restaurant in Newport Beach—when it was an actual Albacore cannery. In the 1950s, his father was on the crew that built two of the boats still in service at Dana Wharf Sportfishing.
To schedule a complimentary wealth consultation or to get a second opinion on your financial plan, contact Sportfishing Financial today. To learn more about Rick, visit his website and connect with him on Facebook. To ask a question or get our list of upcoming fishing trips, call 949-481-1807 or email This email address is being protected from spambots. You need JavaScript enabled to view it..