The holiday season often brings more than just turkey and cranberry sauce; it also serves up a hearty helping of financial questions. As families gather around the Thanksgiving table, discussions about money naturally arise, and who better to field these questions than a financial advisor? Let's explore five financial topics that often come up during these festive gatherings.

The Power of Compound Interest

One of the most common topics is the magic of compound interest. Visualize this: an initial investment of $10,000 with a 7% annual return can grow to over $76,000 by age 65. The secret? Interest on interest. Starting early and staying consistent amplifies your savings significantly over time.

Benchmarks for Savings Goals

Setting savings goals can be daunting, but these benchmarks provide a helpful guide: aim to save 15–20% of your gross income yearly, have 1–2x your salary saved by age 35, and shoot for 10x by retirement. Remember, consistency is more important than perfection.

Principles of Financial Independence

Financial independence means having the freedom to decide your retirement age. Living within your means, avoiding lifestyle creep, and being cautious about not overbuying housing are all key strategies toward achieving this goal.

The Value of Diversification

While tempting, the "what’s hot now" investment mindset can be risky. Diversification across asset classes, tax classes, sectors, and geographies helps reduce risk and supports long-term stability, making it a vital element of any investment strategy.

The Case for Long-Term Investing

Attempting to time the market can lead to stress and disappointment. Instead, focus on a long-term plan that allows you to ride out market volatility and enjoy consistent growth over time.

As you reflect on the financial conversations you've had before, or plan to have this Thanksgiving, remember that asking questions is a smart first step toward better financial health. Feel free to reach out with follow-up questions or to start a more personalized financial planning discussion. 

Happy Thanksgiving!

Disclaimer:

The information presented here is for educational purposes only and is not a solicitation for the purchase of any financial product. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting financial professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.