By Matt P. Brown, CFP®
Some of my fondest memories as a child are sitting in my Papaw’s lap in Hot Springs while he flipped through the newspaper and marked the stocks he owned. I didn’t realize it then, but those times helped me place the first ties on the track to financial freedom. Since April is Financial Literacy Month, and Papaw was a railroad man, allow me to discuss this topic in railroad terms. After all, it’s important to consider our financial health.
So whether the destination is retirement, or a closer station in life such as purchasing a home, paying for college, getting out of debt, or saving for a vacation, the travel plans play an important role.
- The departure: Present your ticket and board the train!
Papaw was known around the neighborhood for his worm farming. A few times we’d talk about fishing and he’d say, “You have to bait the hook in order to catch the fish.” Likewise, you must present your ticket to board the train. Simply put: Start somewhere. Just as a train needs fuel to leave the station, properly using income can fuel our goals. Financial concepts such as budgeting, saving, investing, and even giving are needed to get underway. If these disciplines are used correctly, they can give us a smooth ride. But financial missteps can derail us or leave our tank empty. After you get underway, be sure to keep the fuel flowing. - The route: Choose your line and go!
Papaw also used to say, “You need a plan to get to where you want to go.” As we begin working with a new client, we collect data, including goals, and begin to analyze their current financial condition. To plan a successful trip, we need to know our starting point. Then we can map a route to get us to our destination safely and on time. Passengers may encounter risks such as delays, cancellations, or missed connections, requiring flexibility and contingency plans. We also face financial risks such as market fluctuations, job loss, or unexpected expenses. By understanding our plans, it’s more likely we stay on course, even in tough times. - The conductor: Stop and ask for directions!
“You only know what you know,” Papaw would laughingly say. We all face situations where we just don’t know what to do next. On the railway, conductors help ensure a smooth journey. As we approach a turnout, they make sure the train switches onto the right track. In the same way, seeking financial advice can help us navigate complex financial decisions. Consulting a Certified Financial Planner™ for guidance can help prevent derailments. Your advisor will help to objectively manage risks, diversify your investments, and keep you on track. It’s best to ask for directions if the way seems unclear. - The maintenance: Fine tune the engine and replace what’s broken!
Financial planning is an ongoing process that requires regular reviews and adjustments. It’s important to monitor the status of your plan. If something breaks down on the locomotive, it must be promptly repaired in order to move forward safely. Papaw once told me, “I’ll let you drive the car as long as you keep changing the oil.” He warned me that not doing so would have negative effects such as friction, overheating, and decreased fuel efficiency. Even worse, in the longer term there could be greater loss: engine failure. Monitoring your situation and making necessary adjustments are crucial for healthy finances. Watching your progress and staying flexible can reduce stress and make your trip more enjoyable. - The arrival: Approach your destination with excitement!
As the train rolls into the final stop, it’s quite normal to experience some excitement. You’ve successfully reached that goal you started out to achieve! But don’t stay too long. Papaw liked to remind me that “Success is not the end; it’s the beginning of a new journey.” Financial literacy isn’t a one-time achievement but an ongoing journey of learning. It involves the ability to adapt to changing circumstances and set new goals accordingly.
So whether it’s retiring, living without financial constraints, or leaving a legacy, financial literacy helps us gain better control over our pursuits. Do you remember Newton’s First Law of Motion? It states, “An object at rest will remain at rest, and an object in motion will remain in motion at a constant velocity unless acted upon by a net external force.” Keep moving as you reach different stations of financial freedom. Don’t disembark from the train. Observe your surroundings and see how you can keep going. There are other passengers waiting in line. You may be the one to encourage them to use their ticket. Financial freedom could be just one ride away.
Matt Brown is a CERTIFIED FINANCIAL PLANNER™ who joined Mascagni Wealth Management in 1996. He serves as Vice President and works directly with clients, preparing comprehensive financial plans and investment analysis. Matt is from Jackson and currently lives in Clinton. He and his wife, Paula, have two children, Peyton and Kellan. Matt enjoys photography, golf, fishing, and serving at his church.
