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Stride VOH: Personal Financial Planning for the Business Owner

On October 23rd, we were lucky to have Jan Schalkwijk, CFA and founder of JPS Global Investments lead our Stride Virtual Office Hours on helping entrepreneurs better plan for their personal financial future. It was a great discussion with sold-out registration! You can watch the video and download the slide deck below.  Here are my top three takeaways: 

 

1. The 25x Net Worth Rule 

One of the most valuable takeaways for me was that the rule of thumb formula is your net worth should be 25x what you expect your annual budget to be at retirement. Holy smokes. That is some serious value needing to be created. So if your budget is $100K (after social security), your net worth should be $2.5 million. What’s awesome about this rule of thumb is that you can plan for it and measure it.

 

2. What We Fear We Can Control 

I also found this chart quite interesting from Chapman University–it shows how much we fear not having enough money. As Jan said, “The greater fears on that chart are largely out of our control, but not having enough money is much more in our control.”

 

 

3.We Are Our Worst Enemy

When it comes to investing, we typically underperform. Jan says this is because of something called “The Behavior Gap”, our irrational actions create a sub-par performance. Actions include things like:

  • Herd Mentality
  • FOMO (Fear of Missing Out)
  • Overconfidence
  • Familiarity Bias
  • Recency Bias
  • Anchoring

 

 

I especially appreciated Jan’s insight into a values-based approach to investing, where you want to invest and make a positive impact, does not mean that you will necessarily sacrifice returns. There is objective data to show that the opposite is true. So when you think about putting money away for your nest egg, you can do it with a mission-driven purpose that’s bigger than only you.

Thanks again to everyone that participated, and don’t forget to keep an eye out for our next Virtual Office Hour soon!

 

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