A Father’s Legacy of Life’s Lessons and Financial Planning

By Shaun Peterson/Financial Advisor, RJFS

Dads teach their children so much throughout a lifetime. My dad taught me some very important life principles like discipline, hard work, integrity and honesty. He also showed me how to throw a baseball, shoot a basket, hunt, fish and enjoy the little things in life. He consoled me when I was delivered my first black eye, and despite my resistance he then explained the importance of shaking hands and burying the hatchet with the person who gave it to me. My brother and I are lucky to have such an amazing father. I don’t know what we would do without him. As children we don’t realize the lessons that are being taught through our fathers, but as adults hopefully we can look back and be thankful for what dad taught us in our early years.

Life lessons and memories live on after a father passes. They are ingrained in us from a very young age and are a way for a father to pass on his legacy to his children, grandchildren and great-grandchildren. We can protect those memories by reminiscing from time to time to keep a person’s spirit alive. Dads pass on timeless wisdom that will benefit their family for generations to come. Part of that wisdom is sound financial planning, let’s review some principle’s dads can pass on to their children:

Start Saving Early- In most cases dads want their children to be more financially secure than they are. Encouraging their children to save early and often is one way to build wealth. For younger people who are just starting this may seem like a difficult task. A good goal is to start with 10% of your gross income and increase the percentage every year or when you receive a raise. A common saying I hear is “pay yourself first” and I would agree with that. To make saving money easier inquire with your bank or investment institution about have an automatic amount deducted into your account each month.

Avoid Excessive Consumer Debt- I remember talking to my dad about credit cards when I was young. His advice was: don’t spend more than you make and you should never need a credit card. Pretty simple words of wisdom, but I understand sometimes that’s easier said than done. If life snuck up on you and you are carrying credit card balances put a plan in place to pay them off, starting with the highest interest rate card first.

Purchase Life Insurance- Often people think they only need enough life insurance to cover a major debt like a mortgage. I would say that is a great start, but think about replacing a lost income. If a wife loses a husband at the age of 40 who is making $50,000 a year and had planned to work until 65 that’s a loss of $1,250,000 in future income without even considering inflation! Other goals people often have are helping their children with education expenses, weddings or home down payments. These along with any debts should be considered when deciding how much insurance is enough. Many different types of insurance exist so make sure you consult with your advisor to determine what is right for you. Also, don’t get discouraged if you are older and don’t have insurance in place. If you are relatively healthy you can likely find something to fit your budget.
Beneficiary Review- When was the last time you checked the beneficiaries on your old IRA, 401k plan or life insurance policy? You wouldn’t think this is that big of a deal, but often people forget who they named as a beneficiary. Many young people begin participating in a company retirement plan years before they were married so they name a parent or sibling as a beneficiary. Others may have divorced and forgot to take their ex-spouse off as a listed beneficiary. Can you imagine the how disappointed a wife or husband would be to find out their spouse still had an ex listed on an account? That is not something anyone would want to deal with after losing a significant other. Checking and updating beneficiaries a simple financial planning technique and doesn’t take a lot of time.

Estate Planning- That Will dad wrote down on a napkin one night at dinner isn’t going to hold up in court! Investing the time and money into an estate plan can save your loved ones a lot of time and money down the road if something were to unexpectedly happen to dad. Most estate plans include a Will (pour-over Will), Trust, Financial and Healthcare Powers of Attorney and Medical Directives. If investing in an estate plan isn’t in the budget consider checking beneficiaries on accounts that allow them (IRA’s, Annuities, 401k’s, 403b’s, Life Policies etc.). For accounts that don’t have beneficiaries (Checking, Bank Savings, Investment, Brokerage, Money Markets, CD’s etc.) consider utilizing Transfer on Death forms. Most institutions can make this available to their clients.

Hire a Financial Advisor Young- Dads want to take care of their families. They offer their words of wisdom on many issues their children are faced with. Raising a good family is typically their top priority. When it comes to saving and investing they know it’s important and express that to their kids, but may not have the time or ability to offer children complete guidance. Suggesting their children start a relationship with an advisor at a young age can plant a very valuable seed for their future.

I focused on dads and husbands in this short article because Father’s Day is coming up. I discussed a few financial principles that dads can pass on to their children. I believe they are important points, but I think we can all agree that qualities like compassion, hard-work, loyalty, forgiveness, understanding etc. are the most important lessons learned from dad. I know mine has taught me all of that and more and I’ll always appreciate him for that. Happy Father’s Day to all of the dads out there!

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Shaun Peterson and not necessarily those of Raymond James. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.

Share This