Keep a long term view, this might just be traffic on the road to your destination.

• ...what we can do is still pause and take a look when it comes to finances just like Lauren and I do with that last luggage check. You know, what do we actually need, keeping things in perspective. (02:14)
• Since it took a year to recover in our example now there's only 19 years left for that same $250,000 to grow during our total 20 year period of time that we set. So instead now we've arriving at $1 million with only 19 years to grow, we arrive at a lower number, obviously, around $940,000. (04:43)
• Yes, it's upsetting but it's upsetting because money is a tool that we're relying on to accomplish our goals. So let's frame it back into money being a tool back into the question of how will this ultimately impact us achieving our goals. (06:11)

Quote for the episode: "So if we can still very reasonably expect to be on a substantially similar path for our goals, if we can frame our mindset as such, then we can really look at all of this a little bit more as perhaps traffic on the highway to our destination." (06:26)

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Welcome to the Enjoy More 30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out, and distract our focus

from simply enjoying life.

Hello, and welcome to the Enjoy More 30s Family

Finance podcast, REMIX for Rising Rates. In 2022, there

have been significant declines across pretty much every major

asset class through the end of October. With rates rising

significantly for the first time in a long time, it can be a very

unnerving experience. So what we're doing on this series for

you is going to attempt to kind of help you with that difference

in what we're experiencing, going back and re-mixing a

number of the past episodes to help you emotionally navigate

what have been turbulent times. Each week, I'll be re-mixing a

different episode bringing what I would say are timeless

concepts back into focus of the present day situation. As

always, before I begin, please share and like please leave

reviews. I'd love to reach and help as many young families out

there that are just like you.

Today's episode is a remix of the You May Already Be a Future

Millionaire episode back in Season One. As parents, you

know, there's a ton of packing, if you ever take your little

ones on vacation. In our home, my wife, Lauren does 99.9% of

the packing. She's fantastic. I would say if I put out that,

hey, I do .01%, it could potentially be overshooting my

actual contribution. My involvement really only comes in

at the end. Lauren does all the packing, she organizes

everything. And then I kind of look at everything with her to

say do we need you know, five of these are what we could do with

maybe three or four of those instead, because I'm going to be

the one that you know, it's carrying most of the bags. Now

I'd rather very much so carry 10 heavy bags and not be missing

something that would prevent a meltdown from a child in the

middle of the airport or the hotel. However, I also don't

want to mule carry, you know, way more heavy bags that I

necessarily have to. On vacation, we don't have that

crystal ball. And we don't have that crystal ball when it comes

to living our life either. But what we can do is still pause

and take a look when it comes to finances just like Lauren and I

do with that last luggage check. You know, what do we actually

need, keeping things in perspective.

So projecting where your investments are going, gives you

an idea of where you're at. And a lot of times, you could be

surprised that if you've been doing a good job saving already,

you may have what could turn into $1 million down the road

If you had say $250,000 in your 401(k) at the start of this

year, you listened to my Episode 1.3 and you used the Rule of 72

to see what it may be worth down the road, say 20 years from now.

If we assume 7% growth, you would come up with roughly $1

already in your account. How this pertains specifically to

million. So again, the Rule of 72 says if you take the 7%

interest rate that we're assuming long term and divide it

into that number, that 72, you get roughly 10. So roughly every

10 years, the money should double. $250,000 doubles to

$500,000 for the first 10 years. Then doubles again, the second

today's environment is that we've seen a lot of our accounts

10 years in our example to $1 million, right? $500,000 doubles

to $1 million. So for 20 years that 250 that we have today

would end at roughly the $1 million, according to the Rule

of 72. If your account though, is now down 20%, how does that

change what the projections may be? So first, let's take an

drop down obviously this year, sometimes substantially with

assumption and say that it's going to take a full year for

you to recover back to that same mark. That it would take full 12

months for that 401(k) to get back up to the 250 that it

started on January 1st with. So how does that affect our

what has happened so far in 2022. And what that translates

exercise's results? As the math starts to get a little bit more

involved because you got some odd numbers going on. I'm gonna

I'm gonna jump in and help you out and do it for you. Since it

took a year to recover in our example now there's only 19

years left for that same $250,000 to grow during our

to subconsciously for us now, because it's not a good feeling

total 20 year period of time that we set. So instead now

we've arriving at $1 million with only 19 years to grow, we

arrive at a lower number, obviously, around $940,000. So

still not too bad by any means you're not winding up with

nothing by any stretch of the imagination. $940,000 is nothing

that we get from that. But let's let's go into why it's a bad

to sneeze at. And when we do projections for people that I

would say, it's likely not to have a significant impact on any

retirement projections, most of the time, depending on the rest

of the person's situation, obviously. And a mere $75 a

month increase in savings would make up the entirety of the

feeling is because that money is a sense of security. That money

difference according to all the assumptions that we're making

here. So extra $75 a month, 7% for that last 19 years, and you

make up the difference anyway, so. So essentially, if we change

the way we're looking at it, and we shine light on it in a little

says hey, my goals need this money to be accomplished. So are

bit of a different way, with our example, the goal that we have

of retirement in 20 years, say, would be very substantially

similar, if not identical, with that slight increase the savings.

So again, is seeing your account go down fun? No, it's absolutely

not fun. Is it enjoyable in any way? Of course not. It's quite

my goals now as a result getting in possibly farther away? So

unpleasant. At the same time, we do want to try to be keeping

things in perspective. Yes, it's upsetting but it's upsetting

because money is a tool that we're relying on to accomplish

our goals. So let's frame it back into money being a tool

back into the question of how will this ultimately impact us

let's pause and jump into that a little bit further and just see

achieving our goals. So if we can still very reasonably expect

to be on a substantially similar path for our goals, if we can

frame our mindset as such, then we can really look at all of

this a little bit more as perhaps traffic on the highway

to our destination. So we're still getting to the

how true this statement may even be.

destination. It's just slightly slower, instead of a situation

where our car blew up, and we're never going to reach our

destination at all.

Thanks for tuning in today and join us for next week's remix

episode, How To Talk With Parents About Money REMIX. So

after today's episode, you may see that you may still be on a

path to a million dollars. But what about your parents who are

already retired that aren't earning anything anymore? Are

you concerned about their retirement now with a decline in

their portfolios? So join us next week and we'll help you

bridge that conversational gap. As always, please remember to

review and share for others and if you need any help, don't

hesitate in reaching out. I probably have helped someone

just like you. Until next week. Thanks for joining me today and

I look forward to connecting with you again soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities, Inc., and TFS Advisory Services an SEC

Registered Investment Advisor, Member FINRA/SIPC.