This week, I’m talking about how I invest my money as a financial advisor. 

Today, I’m talking about a subject that hits close to home for me - how much I save for retirement as a financial advisor. 

I started my career as a financial advisor 13 years ago, when I was fresh out of college at 22 years old. Frankly, I am shocked that anyone would take financial advice from my 22 year old self, but a few people did, and here I am today. 

I think if there is a universal truth to what each of us humans dislike it’s a hypocrite. There is nothing more disappointing to finding out that the successful businessman was hiding behind a house of cards, or the upstanding husband was really cheating on his wife the whole time. 

As a financial advisor who has always had a focus on retirement, I consider it blasphemy to not take my own advice. For that reason I have always contributed 10% of my income towards retirement. Some years it’s been higher than that, as my goal is to max out my 401k contributions.

I remember going out to happy hour with friends after work in my early 20s and being really anxious about my $20 tab. I also didn’t travel much in my early 20s because that was expensive and I made the decision to prioritize saving. 

I was also keen on buying a house in my 20s, so I was trying to save as much as I could. Looking back, this was all a little miserly, but 13 years later it has paid off and I feel good about where we are on our path to retirement. Being so far from retirement - potentially 30 years+ at this point - I have no idea what our retirement journey looks like, but the important thing for me is that we’re creating options for ourselves. So if I decide to retire earlier or later than usual, we can afford to do both. 

My husband and I are on track with our retirement savings, so I feel comfortable about where we are on our current path to retirement, which ridiculously enough to most of you listening is still far off in the distance.

By the way, if you want to better understand how on track you are for accumulating wealth, a simple formula created by Thomas J. Stanley and William D. Danko, authors of the "The Millionaire Next Door," can help you determine whether you're wealthy — or at least, as wealthy as you should be.

Here’s how it works: 

[Your age] x [pre-tax annual household income from all sources, except inheritances] / 10 = your "expected" net worth. 

So if you’re 50 and you make $100,000/year, you would multiply 50 x 100,000, which = $5 million. Divide that number by 10, and you have $500,000. 

Under accumulators of wealth (UAWs) are those whose real net worth is less than one-half of their expected net worth.

Average accumulators of wealth (AAW) are on par with their expected net worth.

Prodigious accumulators of wealth (PAWs) have a net worth twice their expected level.

Do the math for yourself and see where you fall in the accumulation of wealth bell curve.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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