ORLANDO, Fla. – Good financial advice often has roots in time-tested, fiscally conservative approaches to building wealth slowly, but surely.
Some of that advice asks that you pause to disassemble and analyze your entire financial situation, learning what works for you and you alone, especially if you’re struggling to save.
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This week on “Black Men Sundays,” host Corie Murray interviews Simon Dogbe, a certified financial planner contracted with Northwestern Mutual since 2010.
Dogbe said he asks people every day, “What is your most important financial asset?”
“If they do own a home, then they’ll tell me that. But if we break down your income, I mean, your income in your lifetime is way up in the seven figures. I mean, multiply your salary by however many years you’ve got left of working, and it is way, way, way, way, way up there, and that is by far the most important thing to protect,” Dogbe said. “You can afford to lose your home, you can afford to lose your entire balance, your savings, everything. If you’re working, you’ll be able to bounce back and be OK. You can’t afford to just not work and expect to be able to keep your house and keep your family and just keep the lifestyle that you’ve started, so protecting your income is the most important part and the first step of, really, financial planning and building that house from the foundation up.”
Originally from England, Dogbe studied business economics and finance at Loughborough University, graduating in 2000. In 2001, Dogbe said he moved from the UK to play rugby in Aspen, Colorado, where he ended up staying for good. Dogbe has two girls — 8-year-old Leila and 5-year-old Livia — and said he enjoys snowboarding and skiing with his family in the winter.
When it comes time to sit down and look at getting your finances in order, Dogbe said the first and most important thing to know is your budget.
“I’m not talking about daily (budget), but you need to know how much, first and foremost, what is your take-home pay every month, and then from that work out that minimum need that you need to spend every month just to pay the mortgage, or the rent, the groceries, the gas bill, that bare minimum you can live on. And then, that difference is your disposable income, and that is a key to your the rest of your world,” Dogbe said. “Because now you know your disposable income, you know how much you can afford to save for the house down payment, save to go on vacation, save for retirement, save for all these things, and how much you can have some fun with.”
A disposable income of $500 per month, for example, would require more thoughtful planning to divide and use than a higher amount, and if you find that you simply don’t have enough disposable income for what you want to achieve, Dogbe said you might have work ahead of you outside the financial planning office.
“What do I need to do to get on that next peg of the ladder? Is it a promotion? Is it a new job? Do I need to go back to school? Is it- do I need to get a second job?,” Dogbe said. “The first thing is, is working out what your disposable income is and then trying to live below your means. Because if, again, whatever you’re bringing in a month, you need to know how much then you can actually spend on living so that you’re not living above your means.”
On portfolios, from his perspective as a certified financial planner, Dogbe told Murray about the the four key asset classes you should strive to have — income from self employment, real estate, stocks and insurance — if stability and organic growth is what you’re after.
“Think about it like a chair with four legs, where the four-legged chair is more stable than any other chair,” Dogbe said. “Now, all these four asset classes are going up and down at different times, different tax benefits, volatilities, to be as bulletproof as we can make you, each one of those four legs then have different kinds of spiders-out, they’re gonna have multiple different assets below them. But starting with those four, then you’ve got all the right pieces of the pie and just keep building and building and building.”
Even with just $50 in disposable income per month to start building your four-legged fortress, diligence will likely lead to that becoming $100, then $200, $1,000 and so on, as Dogbe said that the key is to start where you can start.
Black Men Sundays talks about building generational wealth. Check out every episode in the media player below.