DENTON (UNT), Texas — Local experts are sharing unique, financial lessons with young adults just starting their careers.
The Wealth Builder Challenge is a new book written by Dave Ragan, a University of North Texas adjunct professor and the vice president of financial planning at Grunden Financial Advisory,Inc., and Ricky Grunden Sr., president and CEO of the company. The book builds on their combined 50 years of experience in financial planning and imparts that knowledge to saving and investing newcomers.
“We have clients who’ve had financial plans with us for decades, and it’s been neat to see what’s worked and what has not,” says Ragan. “Not everyone becomes wealthy through a lump sum inheritance. A lot of it is through hard work, and we provide actionable steps to help readers create that wealth.”
Among their advice:
Examine the behavioral aspects of why and how your money is used. The book features Henry, an acronym created by a Fortune magazine writer to characterize “high earners, not rich yet” individuals, as well as Stan, an acronym created by the book authors to represent the “spend today, all now” individuals. The authors say the book teaches Stans to become Henrys.
“The book is for people who aspire to have high incomes one day or graduate with high earning jobs,” says Grunden, noting that the strategies can be applied at any income level. “Anyone can build wealth, and understanding the behavioral aspect of this enables you to make fewer bad decisions.”
Look at your expenses in terms of what it costs tomorrow, not today. An individual who opts for premium cable, a daily latte and lawn-care service, could easily pay $115 monthly. But that amount, if invested in a diversified portfolio over 40 years could net more than $400,000.
“A little bit of money over a long time equals real money,” says Grunden. “My wife and I have been married 41 years, and she started her IRA at $25 a month and gradually increased. It now has a six-figure value.”
Spend no more than half of any raises and save the rest. “Be careful of lifestyle creep – where your lifestyle expenses start creeping into your income,” says Ragan. “We had a client of 30 years who implemented that save-half approach, and we directly saw the impact.”
Create systematic discipline to avoid costly mistakes. Set goals and plan for the unexpected, like a stock market decline, so fear does not drive your decision-making. Also, use a methodical approach, such as automatic withdrawals from your checking account for investments.
“We encourage our clients to dollar-cost average,” says Ragan. “Take a little bit from your checking monthly and invest it into shares. This type of systematic investing ensures that you’re dedicating a portion of your income to your future.”
About the authors
Grunden and Ragan are both certified financial planners and accredited investment fiduciary advisors. Among their accolades, they are recognized as top wealth managers from Five Star Professional. Grunden has also been named a “Top Financial Planner” by D Magazine and has served on a number of boards, including the Texas Association of Business. Additionally, Ragan teaches senior-level financial planning classes at UNT and spearheaded a successful effort to secure a $50,000 grant from TD Ameritrade for UNT’s financial planning program. Ragan graduated from UNT in 2003 with a bachelor’s degree in finance, and Grunden also attended UNT before starting his career.