“What successes have you achieved?”
My business-savvy friend Pauline asked me. Was she referring to our financial planning firm’s revenue or profitability?
As I was thinking about my answer, I saw flashes of faces – our clients whom I’ve had the privilege to work with over the past year. (Names below are not their real names.)
Elizabeth. Elizabeth is in her 20s, and is doing great work in the field of education. She has been burdened with her auto loan for the past year. She does not use her car anymore since moving into the District, and would really like to get rid of it (and her loan). But she didn’t know how to get out of her lease, since the car’s value was less than the loan’s. She only had $300 in her bank. Her student loans were going out of deferment soon, and she would need to start making payments.
We made calls to her auto leasing company and to car dealers in the area. We learned that she can trade in her car and just add $2,000 to cover the gap. With Elizabeth’s negotiating skills, she was able to get an even better bargain.
Now, she is happily car-free, and is using her freed up cash to pay down her student loans. She has saved close to $10,000 in her bank, and will be debt-free in 10 years through the Public Service Loan Forgiveness Program!
However, the base salary offer was slightly below what she’s currently making. No 401k matching. But she really wanted this job.
We crunched some numbers. We considered all factors: her salary, potential bonus, 401k employer contribution, medical benefits, and annual leaves. In addition, we factored in the higher cost of living in New York using a cost of living comparison site.
We came up with a salary that we considered fair. Lauren also raised a good point – in negotiations, both parties tend to meet in the middle. So we decided that she would add a couple of thousand dollars more to her ask, especially since she is uprooting herself.
Armed with numbers to back her claim, Lauren successfully got what she asked for. She’s starting her new job this month!
Sam was a graduate student who did not have any retirement savings. Now he has a 70% chance of successfully funding his retirement by regularly contributing to his new 401k and Roth IRA.
Sophia is a working professional in the Commonwealth of Virginia. She had her IRA invested in just three stocks – really risky! Now she has a diversified portfolio of U.S. and international stocks and bonds.
Alex is in his early 40s, works for a defense company, and receives stock options. We taught Alex a technique to minimize the taxes he’ll have to pay on these stock options. He’ll use the savings for his next vacation to the Caribbean!
Elizabeth, Lauren, Sam, Sophia, and Alex are five of the more than 100 young middle class professionals we have helped empower over the last two years. The Johns and Janes we work with are making smart financial decisions through our financial planning services. They are building a more secure financial future through investing like a pro.
The successes of the people I work with are what gives me inspiration each day. Their victories are our victories. I hope to have more opportunities to give the everyday people the freedom – freedom to tune out from the 24/7 non-stop financial news roller coaster, and let them focus on what’s important to them – their career, health, family, and their highest aspirations.
*Photo by Tubay Yabut Photography
Alvin Carlos, CFP®, CFA is a Financial Planner and Managing Partner of District Capital Management, a new kind of financial planning and investment management firm for the everyday people.