Today’s Prep:

What does retirement planning have in common with growing a garden? Both need patience, vision, determination, and the proper tools to succeed. Eric Peterson explores all the comparisons on this week’s podcast.

Equipping Points:

1:06 Plants don’t grow overnight

• If you want to have a BLT for dinner, you can’t buy a tomato plant and stick it in the ground and expect to eat tomato that evening.
• A lot of clients who retire want to go into gardening because it’s something that you do almost every day but also something that makes you focus on a longer-term goal. Some people struggle, however, with that level of patience. This is true in a lot of younger people who don’t have enough of a long-term focus and don’t see how they need to build up their financial future.

4:18 Keep the weeds and pests away

• If you don’t pull the weeds in your garden, they’ll take it over and choke out your plants and prevent them from growing.
• In the financial world, hidden fees are the weeds.
• Keep in mind which investments carry fees. If you’re investing in things like stocks and mutual funds, there are fees present and you need to be aware of their existence.
• You can’t always eliminate weeds or fees, but you can at least keep them under control and in check.
• Unlike weeds, which aren’t really ever helpful, fees can still be worth paying if you’re getting good value from the service or strategy to make them worth it.

7:00 You need the right tool for the right task

• Your neighbors would laugh at you if they caught you trying to use a water hose to dig a hole or if they found you watering your plants by scooping tiny amounts of water out of a bucket with a shovel and dumping the water on the plants.
• For a financial parallel, consider CDs and money market accounts. These aren’t designed for long-term investing or keeping up with inflation. That doesn’t mean they’re terrible tools, they just aren’t right for that job or responsibility. So, don’t shun a tool just because you don’t understand it, or you’ve used it for the wrong function in the past.

Related Podcasts:

Misconceptions With Annuities

Delayed Gratification

Financial Junk Food

Today’s Takeaway:

“A lot of times people will come in and be close-minded about tools, saying they only want to be invested in stocks, mutual funds, ETFs. Then you’re only using half the toolbox to accomplish your goals. – Eric Peterson“