Steadfast Wealth Planning Podcast

The Essential Blueprint: Financial Building Blocks for a Prosperous Future

• Cody Stansell • Episode 7

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The Building Blocks To Everyone’s Finances – What Should I Be Focused On? 

In this episode of the Steadfast Wealth Planning Podcast, host Cody Stansell, owner and senior wealth advisor, discusses comprehensive Christian-based financial planning for different life stages. The episode breaks down financial planning into three stages: early years (under 40), crucial years (40-60), and enjoyment years (60+).  The episode provides practical advice for individuals and families to establish a strong financial foundation at any age

Key focus areas include maintaining a good cash balance, prioritizing debt repayment, saving for retirement, life insurance, and estate planning. Cody provides valuable insights tailored to each phase, helping you build a strong financial foundation and plan for a prosperous future. Join us for expert advice to secure your financial health through all stages of life.

To learn more about Steadfast Wealth Planning visit:
https://www.SteadfastWealthPlanning.com
Steadfast Wealth Planning
5550 Granite Pkwy, STE 270
Plano, TX 75024
469-606-2040

Speaker 1:

Welcome to the Steadfast Wealth Planning Podcast, where faith and financial wisdom come together. Hosted by Cody Stansel, owner and senior wealth advisor, we provide comprehensive Christian-based financial planning to help families, individuals and business owners build a life they're proud to live. From investment management and tax planning to preparing for retirement, we're here to guide you with clarity, integrity and purpose. Let's get started.

Speaker 2:

Good financial health starts with a strong foundation, but what key areas are you prioritizing for stability and growth? Welcome back everyone. I'm Sofia Yvette, co-host, slash producer, back in the studio with Cody Stansel, Senior Wealth Advisor for Steadfast Wealth Planning. Cody, how's it going today?

Speaker 3:

Hey, sofia, we are blessed, doing well. Wife and I just got back from a vacation we just took about a week ago, so we're feeling rejuvenated and revived and, yeah, we're doing well. Wife and I just got back from a vacation we just took about a week ago, so we're feeling rejuvenated and revived and, yeah, we're doing well.

Speaker 2:

Awesome, awesome, All good things. So Cody financial planning can feel overwhelming, but having a clear roadmap makes all the difference. Let's talk about the essential financial building blocks everyone should focus on. Let's talk about the essential financial building blocks everyone should focus on. What should I?

Speaker 3:

be focused on? Yeah, really excited about this topic. This is probably our most common question I get from clients how are we doing? What should we be focusing on? I even get a lot of people comparing themselves to their friends or whatever it may be. Hey, cody, how are we doing compared to other folks in our age range? So this topic is good if you're in your 20s, if you're in your 70s, anywhere in between.

Speaker 3:

We really think about your financial journey in three different phases. I'm going to put ages on them, but it's really more depending on your goals and how long you have until those goals. But, to simplify it and put it in age terms, so we think of it as years. In your early years, like 40 and younger, what you should be focusing on and doing is a little bit different. And then you have the crucial years. Is what I'll call it Anywhere from 40 to 60, or really five or 10 years from retirement, right. And then there's the enjoyment years right, you're either five years from retirement or already retired, and that's a different slew of topics and things that you'd be concerned about, really the building blocks. I'll start with the early years, the early years.

Speaker 3:

If you're just listening to this and you've never talked to a financial planner and you're just wondering how are we doing? What should we focus on? I'd say the first thing is cash is king. Having a good cash balance is really important. We focus on three to six months of expenses. So simple math. If you spend five grand a month just, uh, living expenses we're gonna want you to have anywhere from fifteen to thirty thousand dollars in a savings account for the what ifs in life. What if you're laid off? What if your spouse gets injured? What if your water heater explodes? You need new tires in the car? Just life, right, those kinds of things that range that three to six months. I'm not going to fight you if your savings balance is anywhere between those two numbers. But if it's below that $15,000 mark in my previous example, I'm gonna say, hey, let's pause investments or pause some of these other things and build that up. Or if it's over that $30,000 number, I'm gonna say, hey, your savings account isn't really paying you anything. We could use some of that money for investments or paying down your mortgage or saving for college or whatever it may be, but anywhere in between I'm perfectly fine with folks. Everyone's a little bit different.

Speaker 3:

The second thing, once you have that cash balance. The second thing is prioritizing your debt. Once you have all your debt paid off, not including your mortgage, so think of consumer debt cars, student loans, credit cards, those kinds of things. So that's the real important there and it really depends on this is where we sit down with folks. It depends on certain factors your interest rate, how close you are to paying one off. Hey, cody, I have a credit card, I have a car payment, I have a student loan. Which one should I focus on first? It really depends. This is where we need to sit down with folks Because, let's say, your car payment first. It really depends. This is where we need to sit down with folks Because, let's say, your car payment, you're five months from having your car paid off. I'm going to want you to pay that one off as quickly as possible. Let's throw money at that, because if we can save that $300 or $1,000 a month whatever it may be as quickly as possible, then we can throw that at the student loan or the credit card or whatever it may be. Sometimes it depends on your interest rate, sometimes it depends on other factors, but in essence, once you get out of debt and then, once you have a good cash position, you don't have any debt anymore. That's really where saving for retirement comes into play.

Speaker 3:

15% is a good generalized number, but we obviously have software that really details. Okay, are we okay at 10%? Does it need to be 18%? We have software to really what are your goals? When do you want to retire those kinds of things? And then, once again, in the early years, once you have those three kind of checked off your list, which I'm prioritizing in the order that you should prioritize them, so go through that list together.

Speaker 3:

And then the next one is life insurance and estate planning. So, especially if you're married, especially if you have kids, this is a big one. We want to make sure, god forbid, something happened to you and or your spouse. We got to make sure your life insurance is adequate enough and your estate planning is adequate enough. Those are two very boring topics, but they are needed, I promise you. And then it's saving for college. Right, we have software that. Okay, little Susie is four years old right now, assuming she'll go to school when she's 18, we have 14 years left. Okay, little Susie is four years old right now, assuming she'll go to school when she's 18. We have 14 years left. Okay, what kind of school does she want to go to? And then answers how much we should be saving every single month, and then it's paying more toward the mortgage. Once you have all of those done and you say, hey, cody, I still have surplus every single month, then I want you to be on track to pay off your mortgage early, right? So there's other topics thrown in there as well, but those are the basics. If you are 40 years old or younger, that's what I want you to focus on right now in your career.

Speaker 3:

The next phase is the crucial years, right? Hey, cody, I'm between 40 or 60. It's called the crucial years on purpose, because we still have a runway to save and invest and plan for your retirement and for your future. But they're crucial because if you don't do it in this phase, guess what? The next phase is retirement, right, and so you can't start planning for retirement in retirement, so you can't do that. So once again, to prioritize the topics here in the crucial years. It's a good cash position, everything that I just mentioned above, same kind of principles there, and then it's a little bit different from there in our opinion.

Speaker 3:

I would put saving for retirement as number two. We have to prioritize having enough safe for retirement. If you're on an airplane and the oxygen masks come down, they tell you to put yours on before helping someone around you. For us, that is your retirement. You can't stay for college or help an aging parent of yours financially or do some of these other things if you are not putting your oxygen mask on for yourself. For us, that's retirement. And then the math changes a little bit. What rate do we need to be paying toward our mortgage? What extra do we need to be paying toward our mortgage to be necessarily being mortgage free as soon as possible? But we want you to be mortgage free day one of retirement. So, lining those timelines up.

Speaker 3:

And then really the conversation from here starts you need to start envisioning retirement. What does that even mean? A lot of my folks, especially in their forties, that's not just an easy topic to have dinner with your spouse about, right, but truly start that conversation of hey, honey, when do you want to retire? What kind of lifestyle do you want to live? Do you want to travel a lot? Do you want to spend time with the grandkids? What kind of lifestyle do you want to live, because usually folks don't talk about it in their early years, but they need to start talking about it in the crucial years. And then the same thing with life insurance and estate plan. It just becomes even more crucial. Usually kiddos are older or maybe they're out of the house, so your estate plan definitely needs to be in order. And this is where a lot of tax planning comes in as well. You're probably making much more than you're making in your 30s, cody. I've never been in this kind of tax bracket ever, so tax planning is more crucial in these years as well. So, once again, more topics in that age range, but those are the basics and that was what I would focus on if you were in that age range. And then, lastly, the enjoyment years right, you're five years or less from retirement or you're already retired, right? Everything that I just mentioned before. Not necessarily throw it out the window, but it's different, right? Retirement is different.

Speaker 3:

So the first priority, in our opinion, is having those three buckets of investment money. I have a podcast We've shot one before where I go into depth on this topic, but high level. I want your investment money to have three different buckets 24 to 36 months of cashflow of expenses, we want you to have invested conservatively, and then another 24 to 36 months invested moderately, and then the remaining of your balance you can have for growth for your future self. So that is crucial to your overall financial plan of not being too aggressive with your investments. If you're in this stage of life and then we have to have our mortgage paid off, does that mean downsizing? Does that mean selling the house that you're in right now and moving into assisted living or an apartment? Or we just can't have a mortgage payment, dragging down our expenses every month.

Speaker 3:

And then taxes. Taxes are higher on this list for retirees than it is for the early years. Do Roth conversions make sense between right now, after you retire, and before you turn on Social Security? Is there a tax window that we can take advantage of where your tax bracket is much lower? And then in this bracket you have to do your estate plan. Your estate plan has to be in order, just naturally, no offense, you are closer to death than you've ever been before. Usually in this phase of your life, your estate plan has to be in order and then it keeps going from there. But for the sake of time, I won't beat you over the head with it.

Speaker 3:

But there's, you don't need life insurance in retirement. Life insurance is income replacement, but if you're not earning an income, you don't need life insurance, right? Unless you have a pension that dies when you do, or you have another unique income stream that stops when you pass away. Then that's the let's talk about that situation. But really it's all income focused. How much income do we need in retirement, matching those cash flows?

Speaker 3:

Once again, we have other podcasts that talk about these topics and then it's leaving a legacy, right? Where do you want your assets to pass? What do you want? The goal of your money after you're gone that you've been blessed with? In essence, those are the three phases that we focus on and they're a little bit different, and once again I'm putting age ranges around it, but it's really more okay. If you're 20 years plus from retirement, you're in this phase. If you're between zero and 20 years from retirement, you're in this phase, and if you're already retired, you're in the next phase. But to simplify it, I put it in age ranges. But yeah, I hope that's helpful.

Speaker 2:

Wow, cody. Thank you so much for those helpful insights for our listeners here today, building a strong financial foundation is essential, and your guidance makes it much easier to navigate. Thanks again, and we'll catch you in the next episode.

Speaker 3:

Absolutely. Thanks, Sophia.

Speaker 1:

Thanks for joining us on the Steadfast Wealth Planning Podcast. Ready to take the next step in your financial journey, Visit steadfastfastWealthPlanningcom for a complimentary consultation or call 469-606-2040. Smart planning Christian values, a life well lived. We'll see you next time.