I still remember the first bad financial decision I ever made. My seven-year-old buddy told me that if I lent him a few dollars, he would pay me back ten a few weeks later. Unfortunately, he forgot all about his debt, and I was left without my allowance. Although it might seem like a silly example, bad financial decisions like that one plague adults everyday. I have had my fair share, and so I decided to create a blog dedicated to helping you to invest your money properly. Before you take your hard-earned money and throw it at a cause, think about the advice on my website to make a great decision.
Do you want to pursue your passions more in your life? After a long time spent pursuing a career, many people find something is missing in their life and want to spend more time working on what they love rather than just working on their careers. If you are considering this type of shift, one key to success is to make a financial plan for its execution. Here's what this financial plan might look like depending on how you want to pursue your new passion.
1. Working Less
Has the rat race sapped your energy and you want to spend less time in the office without giving it all up? Transitioning to a job that takes less of your time gives you more time to build up an alternate career without completely losing your financial safety net. In this scenario, you would want to rework your budget to fit a minimum guaranteed income.
2. Early Retirement
If you're already somewhat close to retirement and have made a healthy retirement portfolio, early retirement could be the best course to take. Your biggest adjustment will be moving up your timeline for tapping retirement funds, including filling gaps like insurance and Social Security, and avoiding outliving your wealth.
3. Changing Industries
Sometimes the problem isn't the work you do but the environment you do it in. If you'd rather use your talents at a nonprofit, a more ethical industry, or a less corporate environment, you may need to take a small pay cut as a result. Your financial plan should address this by rethinking your monthly budget and adjusting for fewer perks (like insurance plans, company cars, or stock options).
4. Starting a Business
Want to chuck the corporate life and start your own business instead? This is a move that takes longer to financially plan for than most. You'll want a more robust liquid savings safety net. You may also need to come up with the capital to get the business up and running. And keep in mind that your new business may not turn a profit for several years.
5. Having a Side Gig
Not everyone's goal is to replace their career with a different pursuit. Some just want to devote more of their free time to something they enjoy. It could be a side gig or a hobby, like writing a novel on the weekends. This makes the least impact on your finances, but you should also have the goal of freeing up more time. Outsource tasks you don't enjoy. Consider moving closer to work to reduce your commute. Or downsize your commitments and obligations so you have more free time.
Which of these methods of pursuing your dreams appeals most to you? No matter what strategy you want to take, a solid financial plan will help you achieve your dream. Start by meeting with a wealth manager in your state today to learn more.
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