Given that October is National Financial Planning Month, I thought it might be helpful to pass along a timely overview of six small but significant steps that can build financial security:

1. Leverage compound interest. Even small contributions to your retirement fund can grow substantially over time. For example, if you invest just $50 a month for 40 years at a 10% annual return, you could end up with around $265,000. This means that your total investment of $24,000 ($50 a month for 40 years) would grow by $241,000 due to compound interest.
2. Automate your savings. Setting up automatic transfers to your savings or retirement accounts can ensure consistent contributions. This “set it and forget it” approach helps build your savings effortlessly and reduces the temptation to spend extra income.
3. Review and adjust your budget. Regularly reviewing your budget allows you to identify areas where you can cut back and redirect those funds toward your savings. Even small adjustments, like reducing dining out or subscription services, can free up funds. In fact, the monthly average value of unused paid subscriptions in 2024 is $32.84.
4. Take advantage of employer matching. If your employer offers a 401(k) match, ensure you contribute enough to get the full benefit. It’s “free money” that can significantly boost your retirement savings. For example, if your employer matches 50% of your contributions up to 6% of your salary, and you earn $50,000 per year, contributing 6% ($3,000) means your employer will add $1,500 to your 401(k) annually.
5. Plan for health care costs. Health care can be a significant expense in retirement. If eligible, consider contributing to a Health Savings Account (HSA). HSAs offer tax advantages and can be used for qualified medical expenses.
6. Make two extra mortgage payments a year. Just two extra payments annually can help you save on interest and pay off your mortgage faster. For example, on a 30-year mortgage for $300,000, with a 4% interest rate, your monthly payment is about $1,432. Adding two extra payments each year can shorten the loan term from 30 years to about 24 years and seven months, saving five years and five months. You’ll also save about $45,922 in interest, reducing the total interest from $215,609 to $169,687.

Financial planning can be complex, especially in today’s economic environment. Regularly educating yourself on financial matters and seeking advice from a financial planner can help you make informed decisions and stay on track to meet your financial goals.

I hope these tips are helpful as you work toward a secure and comfortable financial future. Please feel free to reach out if you have any questions or would like to talk further!

Thank you,

Joe Ezernack

This material is intended for informational purposes only and should not be construed as legal, accounting, tax, investment, or other professional advice. Trademark Capital’s investment strategies are built using quantitative, proprietary algorithms that are designed to identify and react to changing market conditions. However, investors should be aware that no investment strategy or risk management technique can guarantee returns or eliminate risk in any given market environment. As with all investments, Trademark Capital Management’s investment strategies are subject to risk and may lose money. The investment strategies presented are not appropriate for every investor and individual clients should review with their financial advisors the terms and conditions and risk involved with specific products or services. Due to our active risk management, our managed portfolios may underperform during bull markets. Past performance is no guarantee of future results.