Reader’s Perspective: Question and Answer with David Rosell, President of Rosell Wealth Management and Author of “Keep Climbing: A Millennial’s Guide to Financial Planning”

By Paul Curley paul.curley@strategic-i.com | August 28, 2017
How does this world traveler and financial planning expert inspire readers to create long-term financial success?

This article features an interview with David Rosell, President of Rosell Wealth Management and Author of the newly released book titled, “Keep Climbing: A Millennial’s Guide to Financial Planning.” Based in Bend, Oregon, Rosell Wealth Management focuses on Retirement Readiness, Wealth Management and Legacy Planning. Also in 2008, the firm was selected as a finalist to manage $500,000,000 for the Oregon 529 College Fund. With the firm, David is a financial planner that specializes in working with affluent clients who are at or near retirement. Building upon the experience of helping clients through the accumulation and decummulation phases of retirement, David has expanded his expertise to the parallel topic of college financial planning. Within this difficult terrain, he guides millennials to repay student loans amidst a very difficult landscape. As an extension of this goal, “Keep Climbing: A Millennial’s Guide to Financial Planning” was published in June 2017 and takes readers through financial fundamentals in a fun and educational manner through stories. Last but not least, David earned his Bachelor’s Degree from SUNY Geneseo and a Certificate in Wealth Distribution from the Wharton School of Business. You can learn more about Dave, his new book and Rosell Wealth Management at the website of http://www.rosellwealthmanagement.com/. Last but not least, thank you David for your time, insight and support in working with me on the article. Please read the question and answers to learn about his perspective on college financial planning, and hope that the article provides you with an opportunity to learn more from your peers.

Question 1 (Paul Curley, Editor of the 529 Dash): How and why did you first get started in helping clients with financial planning?

Answer 1 (David Rosell, President of Rosell Wealth Management and Author of “Keep Climbing: A Millennial’s Guide to Financial Planning”): There are people in one’s life who act as our guides and impact the fortunes of our lives. My Grandma Ruth, my mother’s mother, was one of those. To this day, I continue to pass along the financial principles she instilled in me at an early age.  I will never forget the day she changed the way I thought about money. I was 19 years old. Boys at that age have two things on their minds and cars are one of them. With great enthusiasm, I shared with her the brochure of the brand new Honda Prelude I was going to finance. It was black on black with a stick shift. She knew how to communicate with a teenager, so she stated how proud she was that I was able to purchase a new car at my age (even though the bank would actually be buying it for me). “You’ll have the nicest car of all of your friends,” she said, right before she shared with me the chart below and explained what an IRA is, how it benefits investors and how the stock market has performed over the years. She then showed me that if between the ages of 19 and 27 I invested the maximum contribution at the time—$2,000 per year—into an IRA, assuming the account compounded at 10 percent per year I would be a millionaire by age 65 even if I never placed additional contributions into the account. Not only that, but I would have more money than if I started investing $2,000 per year at the age of 27 and did so each and every year until age 65. This is when I truly learned to appreciate what Albert Einstein reportedly considered to be the eighth wonder of the world: the compound interest formula. Grandma taught me the difference between working for money and having money work for me. I never ended up purchasing that car. I started my IRA, a decision that would forever change my life.

I knew my next calling was to help people discover the lessons I had learned from my grandmother and share the knowledge I had acquired from watching my retirement accounts grow. By then I had figured out that people do not need to do anything extraordinary to build wealth for their retirement years. They just need to do some ordinary things (like saving a portion of every paycheck) extraordinarily well (saving a portion of every paycheck). By the way, I did not purchase my new car until 11 years after my retirement account had been well established and I had a long-term financial game plan in place.

To this day I know that where I am in life has everything to do with the financial acumen I developed early on thanks to two main sources of inspiration—my father and my grandmother. Grandma needed to teach me how to handle money because I had started to make significant profits at a young age and failure was not an option. This paved the way for my driveway business. My world travels provided lessons that would help me years later when I became a financial planner.

David Rosell - Time Value of Money

Question 2: Did the Wharton School of Business Certificate in Wealth Distribution help you to accelerate your career?

Answer 2: Yes, it provided me with an incredible amount of knowledge and gave me the credibility I needed to start working with high net worth clients.

Question 3: Student loan debt has been climbing on a year-over-year basis, while the US personal savings rate is at its lowest point in almost ten years. How does “Keep Climbing” align with this new college financial planning reality for Millennials?

Answer 3: So far, the 21st century has turned much of the traditional wisdom regarding financial planning upside down simply because the rules of engagement have been completely rewritten. Gone are the days of pensions and defined benefit plans. Social Security has become Social Insecurity. Student loans are now the second largest debt class, behind only mortgages. And saving for retirement is a luxury that many just can’t afford.

Launching into adulthood is never an easy task, but you millennials have it pretty rough—at least compared with recent generations.

But don’t give up. There’s hope.

Through a combination of travel stories and prudent financial and life lessons, "Keep Climbing: A Millennial’s Guide to Financial Planning" will provide you with the financial foundation that’s critical to financial success. Unfortunately, I can’t guarantee or even assure you that the financial coaching contained in this book will enable you to reach your lifestyle and retirement dreams in today’s new-fangled world. What I can pledge is that if you don’t learn, understand and implement the concepts within, your chances of reaching your monetary goals—or even being able to retire and cash in your fun coupons—are likely to shrink to the point where you could very well find yourself in the financial death zone.

That’s why I’ve written this financial planning guidebook. This book will help you achieve far greater financial peace of mind, since—just like climbing a mountain—those of you who recognize and address the unique risks faced by your generation are most likely to safely and successfully meet your financial goals. So fasten your seatbelt, hold on tight and enjoy the journey we are about to embark on.

Question 4: Conceptually, the financial planning guidebook seemed to cover financial fundamentals in an entertaining way through personal stories relating to travel. Do you see financial literacy as the key driver for helping Millennials move forward, and has the lesson been well received so far?

Answer 4: One of the answers to a brighter financial future for our nation is to have financially savvy kids. Schools should teach our kids the lessons of financial responsibility we were never exposed to in K-12—or even college, for that matter. It is never too early to start learning about money. It amazes me that we teach even our young children how to go out and work for a living, but not about what to do with the money once they’ve earned it. As they get older, they learn about politics, history, and family planning, but never about financial responsibility. Shouldn’t there be a prerequisite course on personal finance before one graduates high school, college, or graduate school? Universities know that the average graduate will make millions of dollars during his or her career and yet there is no required course on the basic principles of money management. Personal finance should be as important as reading, writing, and arithmetic in our schools.

Grandma Ruth preached that rather than teach complicated investment strategies, we should offer a back-to-the-basics approach to handling money:

•    Don’t spend what you don’t have.
•    Save a portion of every dollar that you earn and invest in the stock market for long-term rather than short-term gains.

It’s time for all of us to get schooled about money, and for us to financially prepare our offspring for their adult lives. If your children’s or grandchildren’s school will not teach these lessons, it is important that we as parents and grandparents do. Our kids should be encouraged to open up savings accounts rather than credit cards. They need to become knowledgeable about personal budgets, investing for their future, compound interest, and the Law of 72.

I have received very positive feedback regarding Keep Climbing as the topic of personal finance is often mundane.  My book shares prudent financial and life lessons in a way that’s actually fun to read as it intermingles real life experiences and for millennials life is more about experiences than accumulating “stuff”.

Question 5: How can product partners and state agencies better support you now in your current role as a wealth manager?

Answer 5: I believe there should be one department at the federal level rather than 50 individual state departments – each with separate regulations and licensing.

The top-notch investment companies do a very good job educating advisors on the benefits of their products.

Their customer service to the advisors as well as directly with our clients is imperative. Some companies are much better than other at this.

Most of the monthly and quarterly statements are not easy for clients to understand.  Quarterly fees should be easy to see and it would be beneficial if the statements explained how the fee is calculated.  Client do not mind paying more for quality as costs only become an objection is the absence of value however all companies and advisors need to be very transparent when it comes to the fees.

Question 6: Are there any questions that I overlooked?

Answer 6: WHERE DID IT GO?

All too often, financial advice focuses on investing. But you can’t invest if you are spending every dime you make. How much money you save is far more important than how much money you earn. In other words, as I’ve said before, it’s not what you make, it’s what you keep.

Which person do you think will have a brighter financial future? The all-too-common scenario of a person who earns $100,000 a year and spends $110,000, or the person who earns $50,000 and lives on only 90 percent of this income, investing $5,000 for the future?

Here are some straightforward steps to bring your financial planning to life:

•    Spend less than you earn.
•    Save what you do not spend.
•    Invest what you save.

Many people earn just enough money to make ends meet, yet often they do not have a clear picture of where their money actually goes. When I hear someone explain such typical circumstances, I’ll often ask them when they last visited a coffee shop. Their typical answer is: On my way to work this morning.

I had an opportunity to meet fellow financial author, David Bach, when he spoke in Bend a number of years ago. In his book "Finish Rich", he coined a now well-known phrase: the latte factor. The phrase comes from the notion that if you added up the cost of your daily lattes or other similar drinks and saved or invested that money, you could create significant prosperity over time and certainly over a much shorter time frame. The trivial things we spend money on every day add up to a considerable amount of money over time. Most people are unaware of how much they spend on the little stuff each day.

You’ll probably agree with me that it’s very easy to spend $10 a day on inconsequential purchases. Let’s take a look at the simple math. If you were to save and invest this $10 a day or $300 a month into an investment that yielded a conservative 6 percent return, over the course of 20 years you will have accumulated over $142,000. Over 40 years this amount surges to almost $600,000! This can certainly help add perspective.

Here are some of the life and financial principles I think we can all learn from:

•    The tougher you are on yourself today, the easier life will be later.
•    Rather than always working for money, make your money work for you by living below your means and investing the difference for your future.
•    You don’t need to do anything extraordinary to accumulate wealth. You just need to do some ordinary things extraordinarily well. Living on 90 percent of your paycheck rather than on more than 100 percent is a great start.
•    There’s power in compound interest.

If you incorporate these principles into your life, I believe you can have the financial freedom to not only make a specialty coffee part of your daily life in the future, but to experience an espresso in places like Venice, Barcelona, Amsterdam or wherever your heart desires.

A comfortable financial future starts with saving now. One step is to track your expenses so you know where your money is actually going. Another step involves putting those oh-so-accessible debit and credit cards on ice.

Editor’s Final Note: Thank you David Rosell for your time and insight in the article, and much appreciated. Also, I would like to provide a special thank you to the readers of the article for learning from your peers, for your support and your engagement. Have the college financial planning discussion with your clients today.