Article by:
Will Reed
The writing of this series couldn’t have come at a better time. I say this as we have just seen the collapse of the country’s 16th largest bank (Silicon Valley Bank), along with 2 other smaller banks (Signature Bank and Silvergate Bank). Investors as well as working families and small business owners are all asking how safe are my finances and should I withdraw. While I cannot answer those questions from either a personal or professional view, I can, for certain, share with you all, the more disciplined you are with your finances, the better position you put and keep yourself in to survive a banking industry collapse.
Engaging in conversation with people is an easy task, which is why I tell folks I never met a stranger. At some point in the conversation the question is asked, “What do you do professionally?” My response is, “I help people become millionaires.” Of course, one can only imagine the looks this response garners. I then share I am a Financial Professional and I work for my clients through MassMutual to assist them in achieving both short term & long term financial goals. After this, the barrage of questions takes place – mainly about their personal finances and what if… This is where we shall begin the first part of this six-part series on personal finance.
What is personal finance? Depending on the financial professional you ask or what website you visit, you will find a wide range of answers. Ultimately, without all of the fancy words and long, drawn out phrases, personal finance is managing your money. Personal finance consists of five core managing elements that, when understood and strategically combined, can create a plan for the principal owner that will benefit him/her for years to come. The elements that make up the world of personal finance are income, spending, savings, investments and protection. Financial professionals will add, smart personal finance management begins with developing strategies that include budgeting, paying off credit cards, creating an emergency fund (6-12 months of monthly expenses), paying off debt, saving for retirement, college planning, and much more.
Understanding how money works will also aid in managing personal finances. By this, I mean understanding interest, investing, how banks use your money to make money, taxes, and the best places to put your money for short and long term growth, as well as for immediate use. This is not to say you need an in-depth knowledge of all things money, but a good grasp will help you manage YOUR money. The old saying “A fool and his money are soon departed.” is very true. Truth be told, we have all been fools with money at some point in our lives. The goal is to not always be fools!
Over the next few issues we will take a deep dive into the five elements that make up the world of personal finance and offer some strategies from the financial services industry that have provided success. It is important to note there is no one size fits all when employing strategies.
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ABOUT THE AUTHOR: Will Reed IV is a licensed Financial Professional with MassMutual Arizona and has worked in the industry for three years. He holds a BSB in Marketing from San Jose State University, MBA in Marketing from the University of Phoenix, and a Masters of Divinity from Liberty University. He retired from a life of public service after a 23 year career working in the housing sector with the US Department of Housing and Urban Development.