There’s never been a better moment for entrepreneurs to build financial security. As the Covid-19 pandemic continues into 2021, many top performers want fresh advice on how to establish and maintain wealth in uncertain times. According to a survey from Fidelity Investments, more than 68% of Americans experience financial setbacks in 2020, so the focus on bouncing back this year is especially relevant for business owners.
Richard Dolan, head of boutique investment firm LEGACY, has a 30-year tenure in advising high-profile clients, including celebrities such as boxer Mike Tyson and global brands like Google. Dolan’s approach draws from research areas such as financial psychology, behavioral finance, investor resilience, and the “economics of happiness,” giving rise to his very own “urban financial philosophy.”
I recently sat down with Dolan virtually to discuss the contributors to his success, including his top financial advice for clients. Here are the three top tips he shares with all his clients:
Write down a financial life assessment
Before setting goals, it’s essential to take inventory of your current financial situation. First, establish a focus for your financial future. Do you plan to retire at a certain point? How does your lifestyle contribute or detract from your overall wealth? Think through potential high-risk situations. Are you prepared for an income gap, if necessary? How would those potential gaps impact your overall wealth? Answering these questions and physically writing them down will help establish a baseline for financial planning.
Stop chasing results
Conduct an inventory of your financial life. Write out all current expenses, including long-term costs such as a mortgage or car payment. Compare those expenses against current and projected income. What happens if a project falls through? Plan for the unexpected.
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“Stop chasing results,” Dolan advises. “Rather, become the source of results.” According to Dolan, the degree and quality of one’s organization defines and shapes their financial life and performance. Preparing is about having the courage to know precisely where you are and where you are not financially.
Establish your real deal, financial life intention
People frequently think of retirement as a time “somewhere out there.” Instead, plan now. Revisit and reset your vision for what a financial future really looks like. People are wired to do just enough by making ends meet. But in today’s climate of needs and aspirations, especially to make up for lost financial ground – we need more. Dolan recommends determining the exact amount of money required to support your lifestyle for one year. Then, 10X it to determine how much you should have in long-term savings. Taking what you need and multiplying it by ten provides the starting point of a bold and courageous conversation about the potential in one’s financial future.
Overall, Dolan asserts that when people seek a high-performing financial life, they need to maintain a balanced approach to tolerating risk – take chances when necessary, but never lose sight of long-term goals. The battle cry of Dolan’s work is that anyone, and at any time – can live a Great Financial Life – one that is whole, complete and performing.