1. Live off of your base salary for your living needs (House, Car, Living Expenses), and spend less than you make. Living off of your base salary helps you avoid "lifestyle creep", where your expenses increase along with your income, and empowers you to save more of your income.
2. Create an automated savings plan, with target savings percentages aligned with each of your financial goals, for anytime you come into money (commissions, bonuses, or anything else).
🧠 Example: $2,500 commission check; 25% to 401k, 50% to RE savings, 25% for lifestyle spending.
Then automate your savings contributions to be deducted from your checking account each time you get paid. In effect, "playing yourself first". Don't wait to save whatever is left over after spending at the end of the month. Save up front instead and prioritize your savings.
3. Never hold too much or too little in cash. Dial in your emergency level for you specific needs. Not enough cash means having to dip into longterm savings to cover a short term financial emergency. Too much cash means you're losing out on return from "opportunity cost" of that cash not working for you. So dial in your emergency fund to match 3-12 months of your living expenses, based upon what makes you sleep well at night.
4. Make your money work for you as hard as you work for it! #Invest your savings with a strategy to match your goal, timeframe, and tolerance for risk.
5. Stick to the plan! Consistency over time creates a compounding growth effect and generates results.
Taking action on these 5 planning items as a sales professional will get you to retirement faster, guaranteed! Future you will be happy you did.
About the author: Daniel Caycedo is an Investment & Tax Strategist and Financial Advisor for CayDen Wealth Management, a Colorado registered investment advisory firm with offices located in Broomfield, Colorado and Charlotte, North Carolina. Daniel works out of CayDen Wealth Management's Charlotte office, providing virtual, fiduciary, comprehensive wealth management and tax services for high performing professionals and their families. Services include proactive Financial Planning, Investment Management, & Tax Services.