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  • Writer's pictureJimmy J. Williams, CPA/PFS, CFP®

Discipline: The Key To Success



The big “D” is one of the primary factors for the results of wealthy individuals. Recently, I read a story about Ronald Read, a retired gas station attendant and janitor, who had amassed a significant amount of wealth during his lifetime. His story is evidence of the Warren Buffett quote, “You do not need to have extraordinary effort to achieve extraordinary results. You just need to do the ordinary, everyday things exceptionally well.”

Read, of Vermont, died in 2015 and left a legacy that many in his community had no idea he had accumulated based on his lifestyle. Three strategies were utilized by Read on a consistent basis – frugality, diversified investing, and longevity. The two former strategies you can control. Longevity is in your control, and I will explain how later in this article.

Frugality is the primary driver of savings. You have heard the saying, “Save first, spend second.” By treating your future retirement needs as a “mortgage on your future” it is critical that you save for your future prior to spending your money on current needs (or wants). Most wealthy individuals will tell you that they always save first and spend the rest. The percentage of savings depends on the cash flow and projections of future needs in retirement based on a desired lifestyle. Current generations seek to live a lifestyle that outpaces their income streams or utilizes such amounts of their current assets that they have little to save for the future. This approach to life is a short-term gratification at the cost of long-term success.

Read was a “buy and hold” investor. Typically, based on a review of his portfolio after his death, he invested in value stocks that paid a good dividend and simply held them for decades. He had no formal training and invested based on advice from his planner as to the allocation of his portfolio. Read had a vision for his future that included financial independence and did not rely on social security as a sole source of income. Today, based on the Social Security Administration’s research, more than 59% of eligible beneficiaries file for benefits at age 62 due to a lack of savings for the future and concern about their longevity.

To maximize your lifetime benefits from Social Security, it is advantageous for most applicants to delay benefits until their Full Retirement Age which ranges from 65 to 67 depending upon your birth year. However, to allow you the opportunity to delay benefits you must be thinking of your future at an early age. Start saving for your future in your twenties and be consistent with your commitment to a diversified portfolio for the greatest probability of success. Read’s friend and neighbor remarked, “I’m sure if he earned $50 in a week, he probably invested $40 of it.”

Longevity is a tricky one. However, I have some advice that will resolve your quandary about lifespan. Consider the dilemma of dying sooner than you had planned and you had significant assets remaining. Wouldn’t this scenario be much better than the alternative? Most individuals who have failed to save for the future stress about their income and lifestyle during retirement. Additional stress pertaining to their finances is a contributing factor to their shortened lifetime. In our projections of cash flow needs for a client, we utilize the age of one hundred as a terminal point. This sounds a little unsympathetic, but we must determine a factor in which distributions from the assets will cease. In most cases, our clients will have excess assets after their death. They will make inter vivos (which means during the lifetime) gifts to children and grandchildren and remaining funds will be donated to charity upon their death.

Other factors you should consider when planning for your future are family history. This sounds odd, but we always ask about a person’s parents and grandparents when first meeting a client. It is highly probable that a person whose family includes grandparents living until 90 and parents living until 95 may live much longer than anticipated. This is an interesting computation when calculating the lifetime benefits of Social Security and compounding of investments over such a period.

Discipline is the key to successful outcomes. It is not the amount of savings alone that impacts the final amount of funds you possess for retirement. The more crucial factor is the time span which you accumulate and allow the funds to compound within a diversified portfolio.

It is vital that you seek an independent, fee-based CERTIFIED FINANCIAL PLANNER™ professional to guide your process and assist you in carefully planning for your future. Most individuals understand the accumulation of money, but many do not understand the complexities of the financial markets. It is far better to end the game of life with more assets than worry during retirement about how you will live.

Anthon St. Maarten said it best, “Purpose, joy and inner peace are the only status symbols worth having.” See you on the jogging trail!



Registered Principal Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Jimmy J. Williams is an Investment Advisor Representative of Compass Capital Management, LLC, a Registered Investment Advisor. Cambridge and Compass Capital Management, LLC are not affiliated. 321 S. 3rd, Ste. 4, McAlester, OK 74501. Cambridge does not offer legal and tax advice. Please consult your legal and tax advisor for specific estate and income tax planning strategies.

The information in this article is for educational purposes only and is not intended to be tax advice.

Past performance is no guarantee of future results in any investment. Investing involves risk including the loss of principal.


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