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Financial Fitness: just do it

Affluent Hispanics look to professionals for advice

The concept of financial well-being is being embraced by more Latinos as they become the fastest-growing segment of the affluent middle class in America.

“As the American ‘boomer’ generation moves closer to retirement and their exit from the work force, there are many middle-class and upscale Latinos who stand poised to fill the pending economic gap,” said Harry Pachon recently, president/CEO of the Tomas Rivera Policy Institute based at the University of Southern California.

This means Latinos must care about financial fitness as much as their physical fitness.

Also, these more affluent Latinos need to seek the advice of financial professionals, just as they would when hiring a personal fitness coach.

David Fernandez is a financial advisor and founder of Scottsdale-based Wealth Engineering, LLC (www.wealth-engineering.com). Of Cuban ancestry, Fernandez is a member of the National Association of Personal Financial Advisors, a group whose members pass rigorous credentialing.

Fernandez says Latinos need to work up a financial fitness program as detailed as a gym workout schedules. See his tips at right.

Here’s David Fernandez’s Top 10 tips for a sound and successful financial fitness program:

EXERCISE 1: Warm-up by educating yourself on the basics of financial literacy. The basic equipment includes budgeting, savings, investing, retirement planning, insurance, credit cards, banking, credit reports, and wills.

EXERCISE 2: Eliminate stress by spending less than you earn. “We live in a country driven by money, and we can get caught up in that.”

EXERCISE 3: Work out a healthy budget. Figure out your income and your basic expenses (house, car, food, etc.) Anything that doesn’t go to necessities should be put in savings, retirement accounts, and interest-bearing accounts.

EXERCISE 4: Think long-term fitness by creating a retirement plan. If your employer has a 401K plan, hustle into it, he advises. If not, create your own IRA.

EXERCISE 5: Get rid of financial flab by shedding credit card debt. The average American owes $10,000 in debt and pays $2,000 per year in interest. If your interest rate is 18 to 20 percent, that’s too high.

EXERCISE 6: Measure your money muscle tone by checking your credit rating report. You can check your report online free of charge once a year.

“It’s important to do in this era of identity theft,” he adds.

EXERCISE 7: Build strength and endurance by creating an Emergency Savings Fund consisting of three to six months of your annual pay level. If you make $30,000 a year, you should have $7,500 to $15,000 in emergency savings.

EXERCISE 8: Develop your overall financial body by buying a house or condo. This is one of the best ways to develop your assets base.

EXERCISES 9 and 10: Ensure your loved ones are financially fit after you die. Make a will and make sure you have adequate insurance coverage.

“Typically the male is going to pass away first, but good insurance coverage allows the remaining wife and children to maintain their lifestyles,” Fernandez says.