Optimizing your Financial Journey: Cash Flow

Throughout my career, one question keeps popping up: "How much money do I need to retire?" Over time, I've realized retirement isn't about how much you've saved (net worth); it's really about how money flows in and out (cash flow).

Not long ago, a friend was excited about a stock he bought. It went up, and he made some money—enough to buy his dream boat. But when he sold some shares, he had to pay more taxes than he thought. So, he couldn't afford the boat without dipping into his savings. He was really disappointed.

Around the same time, a retired client of mine worried about going to a family wedding because of a long flight. I suggested she fly first class to make it easier. But she asked, "Can I afford that?" After looking at her money from investments and Social Security, I told her she had plenty. She booked her ticket and had a great time.

What do these stories have in common? They show how important it is to manage your money day-to-day.

Your cash flow is like a bucket. Money coming in, like your salary or investment gains, fills it up. Money going out, like bills and taxes, empties it.

It's crucial to have more money coming in than going out. This is especially true in retirement when you're not earning a regular salary anymore.

But it's not always easy to manage money. You might wonder:

• How can I reach my goals without touching my retirement savings?

• Even though I make good money, why does it feel like I'm always broke?

• Can I make more money from my investments while paying fewer taxes?

• Will Social Security be enough when I retire?

• Can I treat myself without hurting my savings?

• Am I missing any ways to make money?

• How can I spend less?

If you've ever asked yourself these questions or felt stuck with your money, it might be time to take a closer look. I'm here to offer some advice on how to manage your money better—for now and for retirement.