Douglas A. Boneparth, CFP®, is the president and foundation of Bone Fide Wealth, a Manhattan-based wealth management firm specializing in high-achieving Millennials. He has been one of the top 10 most influential financial advisers for the past three years, according to Investopedia.
He currently sits on CNBC’s Financial Advisor Council and serves as the CFP Board Ambassador for New York. Douglas and his wife Heather wrote the book “The Millennial Money Fix.”
Douglas A. Boneparth, CFP®
President, Bone Fide Wealth
What is your top advice for people attempting to improve their financial well-being?
My best advice is for people to have a financial system in place. It starts by understanding what your goals are, when you want to achieve them, how much they are going to cost, and which of your goals is most important to you. This way you can account for your first and last dollar of available savings.
To know what you can afford to save each month, you’re going to want to master your cash flow. That is, understand how money comes in and out of your life each month. How much do you spend on what? How much do you need to spend to be comfortable each month? What is that figure? Can you make any changes that allow you to save or save more than you currently are?
Once you determine how much you can save each month, automate it by setting up regular transfers from checking to savings. Before investing, make sure you have paid off any consumer debt and start to build an adequate cash reserve. This is generally defined at 3-6 months of your living expenses. Gaining control of these foundational concepts is your ticket to a solid financial foundation.
Do you have any best practices for improving one’s financial literacy?
Being and staying in control is the best way to become financially literate. It starts by caring about your financial well-being. No one is going to do these things for you because it’s your life and you are ultimately responsible for it. Once you accept responsibility, you can take the first steps that I’ve outlined above to build yourself up.
How can investing in life insurance now benefit someone in the long term?
I don’t view life insurance as an effective tool for building wealth initially. Life insurance is intended to act as a protection first. While there are many insurance policies designed to help accumulate wealth, they are often expensive and difficult to understand.
What are some of the most important things people can do today to plan for the unexpected and improve their long-term financial security?
The cash reserve, having adequate insurance (both life and disability) and basic estate planning documents are the best things you can do to protect yourself from the unexpected, and increase your long-term financial security.
What steps should people be actively taking to prepare for retirement? How do you know what your end goal should be and how to achieve it?
The best thing you can do is have a plan. Guessing is completely ineffective, and using rules of thumbs or simple online calculators don’t go far enough to help individuals understand what needs to be done to reach their retirement goals.
Working with a Certified Financial Planner can help you put together a detailed roadmap for achieving financial independence. Having said that, the first step is to be in a position to invest regularly for retirement, which comes from having a strong financial foundation in the first place.