From Dwayne Rettinger’s perspective, millennial entrepreneurs are more saddled with stereotypes than they should be.
For all the suggested negatives about this generation, Rettinger points out that they are still young enough to be stunningly creative and open to new ideas. But, for a generation that is on average facing more financial obstacles, having access to financial guidance is crucial.
Dwayne Rettinger should know.
He has spent his career in the financial industry, as a management consultant and, since 2007, as a certified financial planner professional and executive financial consultant. His practice with Investors Group Financial Services has focused on helping individuals and small, growing businesses chart out their financial futures.
Rettinger’s particular emphasis is on showing clients how to avoid unnecessary financial risks. Sometimes those are particularly challenging for young entrepreneurs to avoid. It’s so easy to get caught up in the business at hand, allowing poor business financial practices and personal financial planning to get pushed to the wayside.
“It’s too easy for business owners at any age to put those personal money planning issues aside – and they all too often do,” Rettinger explains. “But young entrepreneurs have the opportunity to nip bad financial planning in the bud, since time is on their side.
“If they consider early on the value of an experienced financial advisor, they will find that this kind of guidance puts them – and their businesses – in a much better position over the long term,” he adds.
It’s not just retirement planning that Rettinger encourages young entrepreneurs to think about (although that should be high on any business owner’s list).
One here-and-now issue they need to consider is a common practice of putting all their resources back into the business while personally, they’re on a starvation diet. Bad idea, Rettinger says. “You don’t have to overdo it and take a six-figure paycheck,” he notes. “But at least take enough to keep your personal finances straight and separate from your business.”
A second one is to plan for the worst, because no one is bulletproof. That means having a succession plan and sufficient insurance, including disability and life insurance, to protect your personal interests and your family’s, too.
YoungUpstarts recently interviewed Dwayne Rettinger for his perspective and guidance on how young entrepreneurs should think about the financial side of their business and lives.
What do you think are the biggest misconceptions about Millennials and how they handle their finances?
Dwayne Rettinger: I think that one of the biggest misconceptions is that young professionals and entrepreneurs have a ‘defeatist’ attitude when it comes to personal finances, and that they are free spirits that are only interested in ‘living for today’. The vast majority of young people I work with care as much about building personal financial security, as they do building their careers and businesses; moreover, they know that the actions they take today can and will make a difference in their financial futures.
The other common myth is that Millennials don’t value personal advice, given that they are adept at technology and social media platforms. While they certainly have a wealth of information at their disposal, they do appreciate personalized guidance that incorporates context and an in depth understanding of their unique situation.
You work with small and startup businesses whose owners span the spectrum of ages. What do you think they can learn from each other when it comes to financial readiness and planning for personal and business goals?
Dwayne Rettinger: I think that more ‘mature’ business owners certainly have the benefit of experience and ‘scar tissue’ that can help them avoid the pitfalls and traps of growing a business, but in many cases narrows their focus to the point where they can miss out on opportunities that may be outside their ‘comfort zone’. Younger clients that I work with are ‘wide open’ to creative strategies and concepts for building wealth and financial security down the road.
How would you recommend young entrepreneurs, especially in the startup phase, handle their retirement planning when it’s likely that much of their available funds is being invested back into the business?
Dwayne Rettinger: I think the mistake that many entrepreneurs make during the early stages is adopting an ‘all or nothing’ approach to their wealth building activities. While investing time and money into a new business is essential for success, reinvesting all surpluses back into the business without regard to personal financial health is not only risky, but it squanders the most important asset when it comes to building personal wealth – time.
Even small systematic savings habits have an enormous impact when applied over the long term. Millennials have a distinct advantage over their older business peers, and that comes in the form of a longer time horizon. I always preach ‘start small, and learn not to miss it’. In this way, you are more likely to stick to the plan and not feel you are depriving your business or your lifestyle from needed cash flow.
Are young entrepreneurs more or less likely to cut corners on getting outside expertise – going the friends-and-family route for cheap help or self-educating with online resources? Why is that dangerous, and what ways should they think about to access effective experts without breaking the bank?
Dwayne Rettinger: I think being ‘fee aware’ is very important in an environment where options and platforms for delivering and receiving advice are plentiful and diverse. I would also suggest that absolute fee avoidance can be dangerous and lead to bad outcomes when off the rack solutions are employed in the wrong circumstances.
While there are many low cost options for banking and savings platforms that are essential to any business or household, when the focus shifts to building and protecting invested capital, then cheap doesn’t always equal better. Building financial wealth requires deliberate planning to allocate your scarce resources effectively; this includes cash flow planning, debt portfolio management, risk management, tax planning, and proper portfolio design. If you’re a business owner or young professional, it almost always involves careful succession and estate planning as well. These specialized services have fees associated with them, but the value in terms of both net worth and peace of mind, outstrip the costs.
Most people have some sort of “do-over” they would like to have a chance at, and that others might be able to learn from. What would you do over in your career and what’s the takeaway from it?
Dwayne Rettinger: With the benefit of hindsight, there’s really only two things I might do differently if given the chance. The first one is a bit ironic given my profession, but I would have certainly benefited from a formal and documented financial plan at a much younger age! I was too free-wheeling and hid a lot of mistakes with good income at a relatively young age. I would have been much further ahead had I applied my available financial resources deliberately under a comprehensive plan.
The second thing I would consider is taking more professional and business risks earlier in my career. I resisted my entrepreneurial leanings early on in the pursuit of security and safety. Some of the greatest opportunities for growth, learning, and wealth building, require some risk taking. For the most part, the consequences of financial risk taking when you are young are modest, and you have ample time to recover if and when things go wrong. The costs of procrastination – both professionally and financially – are almost always more difficult to overcome.