Dr. Nathan Harness, the TD Ameritrade Director of Financial Planning at Texas A&M University, recalls a time when he connected self-worth to net worth. But that all changed fresh out of college after surviving New York’s 9/11 terrorist attack on the World Trade Center, the Twin Towers falling behind him. As a Morgan Stanley stockbroker who worked on the 61st floor of Tower 2 at the time, he escaped the building’s collapse by 15 minutes, thanks to the selfless acts of rescuers.
“Firefighters and others risked their lives, if not gave their lives, for the opportunity to get me out of the building,” said the financial planner, who teaches courses in investments, comprehensive financial strategies and retirement planning at Texas A&M. “It made me realize what is important in life. You have to connect the values you have to the value that you create. If you aren’t doing that, then your money doesn’t have value. The biggest regret I hear from people is that they didn’t direct their money to things they cared about.” To that end, Harness offered these money tips to help manifest those lifetime goals:
Follow this rule of thumb. Take inventory of your finances, aiming for 50% of income for basic needs, 30% for “wants,” and 20% for savings and future emergencies. “Saving for an emergency is a reverse credit card of sorts so you can borrow from yourself instead of someone else when times are tough,” he said. If you use your emergency fund, it is equally important to replenish it once your finances stabilize.
Set specific, not nebulous goals. What financial goals are most important to you? Think through those goals and write them down, then share them with another person for accountability. Not doing so is akin to a person on a weight loss plan who has no declared target weight and tells no one about their efforts. It won’t go well.
Take interest in interest rates. With interest rates at an all-time low, now is the time to evaluate the rates on debts you owe. “Maybe it’s refinancing a home or taking a look at those student loans, especially if they were privately funded,” he said.
Don’t wait to automate. It takes willpower to save, so why not eliminate the temptation to deviate from your financial plan by automating where you can? Arrange for a portion of your paycheck to be automatically deposited toward a certain goal like retirement or that special trip. “Take the potential decision to backtrack from a goal away from yourself,” Harness said. “If you don’t automate, will you stick to the plan?”
Maximize your employer’s retirement match. Maximizing an employer’s 401(k) plan match is one of the most important strategies for retirement planning. “Most people don’t like to talk about retirement. We view it as something in the distant future, but I’m here to tell you that future comes fast,” he said. “I encourage people to reconsider the amount of matched dollars that their employer is setting aside in their retirement account. Do your best to, at the very least, contribute the minimum amount to get that retirement match at work. I can’t say that enough. Pension plans have gone away. You are responsible for your financial future, and you’ve got to take charge of that. The best time to begin is yesterday.”
Make a Difference: A generous gift from Fran and Bill E. Carter ’69 was recently created to support financial planning at Texas A&M and will serve as the foundation for developing future financial leaders. To further support this important initiative, consider making a gift to the Financial Planning Excellence Fund at give.am/FinancialPlanExcelFund.
