Building wealth and achieving financial independence are dreams shared by many, but the path to early retirement requires a blend of strategic planning and committed action. In this interview,
Simeon Esprit, co-founder of
Bethesda Wealth Planning Group, offers his expertise on setting a clear financial course with a focus on clarity, confidence, and risk management.
Getting started
Joy Wallet: What are the first steps someone should take when starting their journey toward building wealth and planning for early retirement? Simeon: The first step is figuring out where you are right now. How much income are you receiving? How much are your monthly expenses? You need to know
whether you have a cash flow surplus — and if so, how much, if you’re in a deficit or breaking even. This will determine what you should prioritize next. Budgeting is not the most fun thing to do, but it is a crucial step toward building wealth. Online banking apps and
budgeting apps can speed up this process.
Effective financial habits
Joy Wallet: In your experience, what financial habits have you found most effective for people aiming to retire early?
Simeon: Automating your investments as well as your savings. There is a reason that the 401(k), 403(b), or TSP account is usually people’s largest asset outside of their home. It’s because they are investing without having to think about it. The real cheat code to getting ahead is automating as much as you can. Our industry calls this a periodic investment plan, or PIP for short because we love a good acronym.
Risk management in financial planning
Joy Wallet: How does risk management factor into a long-term financial plan, and what common risks do people tend to overlook?
Simeon: We all think that we are Superman or Wonder Woman. We think that nothing will happen to us that could drastically impact our future. In reality, one in four Americans will experience at least one disability that will prevent them from working for a period of time. Nobody plans to get sick, but we all get sick at some point. Having appropriate
disability insurance and
healthcare coverage is a necessity.
Simplifying investment options
Joy Wallet: What advice do you have for people who feel overwhelmed by the variety of investment options available today?
Simeon: It is understandable. There is no shortage of advice out there. I would suggest keeping it simple before adding complexity. Diversify your investments using
ETFs and
mutual funds rather than
individual stocks. ETFs and mutual funds can act like one large basket of multiple companies. Having a broad approach can help mitigate risk and keep things simple.
Financial efficiency for busy professionals
Joy Wallet: For someone with a busy career, what simple steps can they take to manage their finances without spending too much time?
Simeon: Work with a financial planner. Consulting with a financial planner will be helpful if you are missing at least one of the three things below:
Time. Delegate to a professional. Personal finances are too important to leave by the wayside.
Knowledge/execution. If you do not have the knowledge or framework to bring to life what you need, work with someone who spends every day doing it for multiple people.
Emotions. Emotions can get in the way of you making and sticking to good financial decisions. A third party can help you be accountable.
The financial planner's advantage
Joy Wallet: What are the benefits of working with a financial planner versus self-managing your investments and financial planning?
Simeon: There are a few. If I had to choose one, it would be clarity — clarity in what you are currently doing, what you should do, and what you should not. For somebody who is doing everything right, it is reassurance. For those unaware of all the options and strategies available to them, it could save them years on their financial planning journey. Lastly, if you are doing something incorrectly, it is better to know now than 10 years from now.
I like to make the comparison to visiting your doctor for your annual physical. Whether you are healthy or dealing with an illness, it is wise to consult your doctor. The same goes for a financial planner and your personal finances.
Client success stories
Joy Wallet: Can you share a client success story where implementing a specific financial strategy made a significant difference in their retirement planning?
Simeon: We have a client who was not sure how to invest appropriately during retirement. They decided to invest most of their wealth in the money market and bond assets for safety. What they did not realize was that with their current spending, they were at risk of running out of money. This is because they did not account for inflation.
We decided to use a bucketing approach. We segmented their funds to accomplish three objectives: immediate cash needs for the next three years, money to grow moderately, and remaining funds dedicated to growth that will not need to be touched for at least another eight years.
This approach has drastically increased the longevity of their retirement assets while providing ample income for their daily spending. Most importantly, it was a strategy they could understand and confidently sustain with guidance.
Maximizing monthly cash flow
Joy Wallet: What are some practical tips for individuals looking to free up monthly cash flow without drastically changing their lifestyle?
Simeon: We have the most wiggle room with our discretionary expenditure. I enjoy that many people practice substitution instead of abstinence.
I will use the age-old Starbucks coffee analogy. Instead of telling people to abstain from drinking expensive coffee to save money, the substitution would be to buy a really nice coffee and expresso machine instead. You are replacing one ritual with another, which will save money over time.
Intentional financial planning
Joy Wallet: How can people ensure they’re making intentional decisions with their finances instead of just reacting to short-term needs?
Simeon: Write down what you want to accomplish and why. If you want to take it a step further, you can add a deadline. When it comes to money, we all overestimate what we can do in one year, and we greatly underestimate what we can do in five. Writing down what you want to accomplish and why will help anchor your decisions and serve as a constant reminder of what is important to you in the long run.
Avoiding financial pitfalls
Joy Wallet: What are some common financial mistakes you’ve seen people make when trying to achieve financial independence, and how can they be avoided?
Simeon: I have seen many people wait until they are debt-free to invest. The longer your money has to accumulate and compound in an investment, the greater your chances of a positive outcome. We ad planners talk about “time in the market” often. The length of time you invest is your most powerful tool.
The challenge is finding a healthy balance between investing and paying off high-interest debt.
Building confidence in financial decisions
Joy Wallet: How can someone develop confidence in their financial decisions, especially if they’ve previously experienced setbacks or financial challenges?
Simeon: Financial setbacks are rough. I would suggest confiding in someone you trust. You do not have to talk specifics, but I do believe a problem shared is a problem halved. When it comes to money, we have been trained to keep money conversations close to our chest. In reality, we are all dealing with something uncomfortable relating to money.
The next step needs to be action. Depending on what the setback is, there will likely be steps you can take towards a more favorable reality. If you are not sure what those steps are, consult with a financial planner.
Aligning actions with goals
Joy Wallet: What are some actionable steps people can take today to align their financial decisions with their long-term goals?
Simeon: A great way is to work backwards. Ask yourself what you want to do. Some people have told me they want to be teachers, but they also want to live lavish lives. Others have said they want to retire early or travel more.
Finding joy
Joy Wallet: What brings you the most joy in life?
Simeon: My daughter. She lights up my day no matter what kind of day I’ve had.
