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Regardless of the amount of income earned, why do so many travel nurses still screw up their finances?
Contrary to popular belief, it’s not just because they may or may not have money goals.
The truth is, it’s because they don’t know how to manage risk.
If you’ve been following me for any length of time, you know how passionate I am about not being greedy in your financial endeavors. The trap with just setting goals is that goals are typically just fueled by financial desire. And they tend to be overly optimistic.
Today, I want to switch your mindset to that of a firefighter, a health inspector - somebody who looks out for risks, violations and then puts a plan in place to mitigate them.
In essence, I want to switch your money mindset to that of being a risk manager.
To put it quite simply, there are inherent financial risks of just living your life. So when you’re creating a financial plan, you need to create a plan to meet the needs of those risks so you can live a life that you want to live on your own terms and close your life with dignity.
So how can you be an effective risk manager when it comes to making a financial plan?
A good risk manager would be asking questions like:
What do I need to live the type of life I want in my working years and throughout retirement?
What risks could potentially derail my plans on the way to achieving that lifestyle?
What strategies can I put in place to reduce those risks?
The most universal risk is probably loss of income. So using the questions above, what solutions could you come up with?
Well, perhaps you could put aside a certain amount of money to live off of if for whatever reason you didn’t have income for a couple of months. That’s one emergency addressed.
What if you’re injured at work and don’t know if you’ll be able to work for a longer period of time? Well, you could get a disability policy that would give you a percentage of your income until you’re back on your feet.
Those are just two examples of looking at the risks of living your life, living the type of life you want and how to address that risk by having a plan.
So, as a good risk manager your job is:
Identify the risks
Identify the costs associated with the risks
Create a plan to either eliminate or reduce that risk.
Look, I talk to a lot of travel nurses just like yourself that besides saving for retirement, may not have a whole bunch of financial goals. It may be because you're at the starting stages of their career or they’ve never really given much thought to it. So, a really simple solution to creating a financial plan is identifying the risks and getting rid of it.
Marlon is a licensed financial advisor at weshfinancial.com and is known as "The Travel Nurse Financial Advisor". Marlon specializes in helping travel nurses crush their financial goals by helping them optimize taxes, accelerate retirement savings, and maximize their investments.
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