We love chatting with local business owners and influencers as they impact the world with their own focus on wellness and self care. We sat down with Gabe, a Financial Advisor with Northwestern Mutual to ask him a few questions about financial health. Check out his responses, and be sure to contact Gabe if you have a need for financial direction.
I'm Northeast Ohio born and raised! I grew up in Hudson and then went onto Baldwin Wallace where I played football, ran track, graduated first in my class, AND met my soon to be wife Lauren there as well. Now I live downtown and am confident my address will always be Cleveland, but we love to travel and create memories with family and friends.
What do you do?
On paper I am a Financial Advisor and College Unit Director with Northwestern Mutual. This means on top of my financial planning practice, I get to help run our internship which is incredibly fun and my own little leadership lab. To describe my role best I have to ask a question first, “When completing a 500 piece puzzle, what is the most important part of the puzzle?”. Many people, myself included quickly answer, “THE CORNERS”. While the corners are very important and useful, the most important part of the puzzle is the box that has the complete picture on it, guiding you through the entire process. It would be very difficult to complete a puzzle successfully without the box, and we know life and finances would be equivalent to a 1,000,000,000 piece puzzle!
Why did you choose the finance world?
During school I was lucky enough to have thorough conversations with mentors about ‘Career Anchors’, to help prioritize what I wanted out of a profession. Immediately I knew that I needed to be in an environment where I could have independence, always be learning and challenging myself, make an income to fulfill the vision for my future, and most importantly make an impact. Sacrificing even one of these 4 things was not something I was willing to do or ever saw myself being willing to do. Thought an internship would be a great way to test drive the career and now 8 years in I am extremely grateful for where that has led and the never ending pursuit to fulfil all 4 anchors.
Why should everyone have a financial advisor? Do I pay for a financial advisor/how does that work?
On the surface I believe everyone should have a financial advisor to help them have their financial house in order. This could include fundamentals such as making the best choices within employer retirement programs and stock options, figuring out an overall budget and savings philosophy, debt management, protecting your income, and goal setting. These are things that many people get advise on from a family member or the internet. Deeper than that, a financial advisor should be trained in a way to not give direct advice right away, but rather to make education the focal point of their work with clients. Helping clients connect the dots on the how all the pieces fit together and in a way tailored to them based on their priorities. Clients often tell me the best part of our conversations is they feel encouraged to think big while applying action steps to achieve that big vision and relieving the stress and anxiety of it all.
How advisors get paid can vary, for example, I do all the introductory and educating and planning for clients all for free, then based on which tools are implemented I receive a commission or fee. That fee typically is the same as what you would pay anyways if you tried to open the same type of account on your own. The difference then being having a 1-800 number to call or me! Because of this model it serves me very little to have a client for a short period of time, but add up decades of happy clients and a lot of crumbs build a cake! In other scenarios there may be an upfront planning fee, or an overall fee added to the relationship or accounts being used and I am happy to answer more questions about this if someone is still curious.
Do I need to have “a lot of money” to utilize a financial advisor?
NO. My mom used to tell me “Begun is half done”. Being the analytical person I am I told her she made zero sense. Quickly as life went on I knew my mom was onto something. Getting started is half the battle! Everyone deserves to be educated and have a plan created for them. Then the action steps from there could include things like paying down loans or credit cards, building up savings, and how much to contribute to your work retirement program. All of these things technically have nothing to do with the advisor themselves, but they know if they can help you with all of that then you are likely to be able to save and invest more in the future. Most of my favorite and most rewarding client relationships started with individuals or companies that I was basically giving free consulting for years before we ever technically did any business together. To add some specifics I would aim for a minimum monthly contribution of $50 and some accounts have even lower minimums.
Any good apps out there to help track, save or budget your money that you would recommend?
Anything that helps you set goals, track your expenses, and create a vision and positive affirmation for your money mindset will be a great start to forming the right behaviors and habits. Apps can help tremendously with this. Mint would be my first recommendation! Having a partner, if that’s a friend, spouse, mentor, or financial advisor to help hold you accountable though will be the most effective.
Tips for teens/young adult that are working and starting to make their own money:
The first place to start is helping them build the habit of saving 25% of their income. Really the target is 20%, but if they are doing 25 to start they are more likely to stick to at least 20 for the longer term. Educating them on the power of compounding interest is huge as well, this combined with good spending/savings habits are the keys to a strong financial future.
Money tips for people in their 20s:
20/60/20 ! A ton of research has gone into figuring out how to optimize planning to allow for people to spend their life living in the now, while simultaneously putting themselves in a position of strength for an uncertain future. This resulted in the 20/60/20 Rule! The first 20 is for 20% of your income being SAVED. First and foremost right off the top, paying your future self first. The 60 represents your living expenses such as your major fixed bills as well as the not fixed, but still recurring items like groceries, gas, pet care, dining, ect. The last 20% is earmarked as the discretionary bucket. This bucket is used to flex back and forth based on current priorities. This is the bucket that in some phases of life could be used towards debt or extra savings for a major purchase or trip!
Money tips for people in their 30’s or 40’s:
Many of the tips discussed still apply here, but some unique challenges may exist as well. For example, for people who want to see if 1 parent can go part time or stay at home with the children, calculating cost of private school and/or college for children, or another example would be those looking to make a big career move or start their own business. We see all of these all the time and using a plan is really the best way to mix the math behind the numbers with the emotions and the heart of each person and their situation. Worth adding as well is the 40’s could be an optimal time to look into Long Term Care Insurance. This is insurance to help against the costs of ever needing care later in life. We see this as one of the biggest risks to someone’s retirement due to such the high cost. In your 40’s you are likely still be young and healthy enough that the Long Term Care premiums are affordable to protect against this retirement risk.
Money tips for retirement:
There is so much we could talk about here! The main things to be aware of is that 401k’s, IRA’s, Roth IRA’s all make us wait until 60 to access those funds otherwise there is a 10% Penalty. This is important to note if you are planning an early retirement or even if you are someone who wants to work forever because you love it. The next key with retirement planning is making sure that we don’t run out of money! This has to do with both the growth of your assets during your retirement years and figuring out how much you need to live on annually based on your desired lifestyle. The optimal mix of still taking on some risk for growth, while still providing an income stream to live off of can be delicate, but most clients learn quickly and we are able to confidently find that appropriate mix together.
Should I invest my money? Should I put it in the stock market? I want my money to start making me money... any suggestions? Again... does someone need a lot of extra money to invest?
The #1 indicator of your financial future is your ability to save. Life can be hard. Saving/investing at least 20% could still not be enough in some cases, but by having your money make money, that will put you in a position of strength for whatever life has in store. The stock market is one great way to ‘employ’ your dollars. A plan will help identify how much should be saved in the bank, in the stock market, or elsewhere like real estate.
Lets talk debt... And getting out of debt...
THIS! This has SO much to do with mindset. I know people who have endless amounts of student loans and even though they have a great income they stress so much about the loans and let them dictate their life. The other side of that is someone who has a bunch of credit card debt and is acting like it’s no problem and letting it rack up. Neither is likely optimal. It is all about the PLAN, figuring out how to balance lifestyle now, manage debt, and save for your future. The 20/60/20 model will help with this. There are solutions to dive into about getting out of debt, but all of them are a fight and a uphill battle to win. The KEY is once that battle is one, to begin to save in a place that is liquid and available to you so the next time you feel impulsive on a big purchase or some annoying big cost comes up, you are able to take care of that without having to go BACK into debt.
Lets talk credit cards and the pros/cons:
Mindset is big here too. Credit cards are incredibly beneficial in the right circumstances, but when abused can lead to a personal financial crisis. You must have a plan. I also encourage you to have someone you trust (friend, spouse, mentor, advisor) and be transparent with them about your credit card usage! Not fun, but works! Credit cards have helped do amazing things, like keep a starting business afloat that goes on to make a huge impact on the community and be crazy profitable. Or help with the costs of something major, or as simple as 10 friends going on a trip and you put it on your card and have them pay you and you get all the points !! The plan and accountability is the key here, as long as you are not lying to yourself about your ability to pay them off in a timely manner they can be useful, but dangerous.
#1 College Unit Director Company Wide at Northwestern Mutual
My mission is to be contagiously happy in my pursuit to fuel the visions of others, while I relentlessly fulfill my own. This is a responsibility that, without exception, I will gratefully and joyfully execute.