How to Explain to Prospects They Should Invest Now

As you know better than I, clients are always looking for a more convenient time to invest. There’s always something to do – like buy a new car, redo the home, whatever it is.

Listen to the audio podcast or read the transcript to learn how to convince prospects the time to invest is now.

The time to invest is now – we can’t put it off.

I’d like to just give you a very typical example of what I go through when I do client seminars and the conversation I have with clients. I’m sure you have the same conversation so I’d like to offer you a way to deal with it.

Whenever I do a seminar, at least one couple approaches me after the seminar; it doesn’t matter if it’s in the United States or abroad. It’s always the same thing. The husband, who is approximately 45 years old, will introduce himself to me.

“Hi, I’m Joe, I’m 45 years old. This is Susie, Susie’s 42 years old. We have two kids, one’s in school, one’s out of school. I want to retire at age 65.  I currently make $40,000 a year. What do you think I should do?”

I say, “You know, don’t you wish you’d started sooner than tonight?”

“Yes, I do.  But at some point I want to get started.  So what do you think I should be doing?”

And I say, “Joe, let me ask you a question, how much money do you want to live on annually when you retire?”

“Oh, we want the whole $40,000. We want to be able to travel and do things we’ve never done.”

He’s forgetting Economics 101, hasn’t he?

For ideas on stories and phrases you can use with your clients check out Don Connelly’s CD, Simple Truths for Investors.

His $40,000 income today will probably mean he’ll need fifty, sixty, $70,000 when he retires due to inflation. But I give him the benefit of the doubt.

I’ll say “Well, Joe, that’s fine, you can replace your $40,000 per year. All you need is a lump sum of money generating a fair rate of return. What’s a fair rate of return?”

And of course he doesn’t know. And I’ll say “Joe, look. Let’s assume you can get 5% on your money. How much money do you need at 5%, to generate $40,000 a year?”

Now clients don’t go to math class – they all skip math class. He can’t do the math. How much does one need at 5% to generate $40,000 a year?

The answer is $800,000. Now we know he’ll really need fifty or $60,000, but I’ll say “Fine. You can get your $40,000 per year – all you need is a lump sum of $800,000 generating a return at 5%. There’s your $40,000. Joe, how much are you worth now?”

Now you’re the advisor, you deal with 45 year-old couples all day long. You tell me, what’s a 45 year-old couple worth?

If you tell me they were broke, it wouldn’t surprise me. We buy a named-brand this and named-brand that for our kids. Right now, one year of college is the cost of a good car. It’s hard to save money until you’re at least fifty years old, I don’t care where you live in the world. So what do you want to say they’re worth? $200,000? $300,000?

They’re not, but let’s say they are. Let’s say Joe says to me, “We’re worth $300,000.” And I say “Joe, you need $800,000, you’ve got $300,000. You’re $500,000 short. Where are you going to get the other $500,000?”

He says “Don’t worry about it, don’t sweat it. Twenty years are a long time, I’m only 45 years old.”

And I say “Joe, in America, and it’s probably true around the world, husbands pre-decease their wives. Two-thirds of our women die single. It’s just the way it goes. So at some point, every woman is going to be making financial decisions for herself.”

So I’ll make sure she’s listening. And I’ll say, “Joe, if you’re 45 years old, and you get paid once a month, and you want to retire at age 65, you have 240 pay-checks left in your life. Period. Now, Joe, you make $40,000 a year. Are you going to save $500,000 in the next 240 pay-checks?”

You and I know that’s not going to happen. I say “Joe, you’ve got to run, not walk, to your nearest financial advisor.”

Put it in terms they understand.

* This podcast originally appeared on Don Connelly 24/7 – for access to hundreds of podcasts and more training materials, join today – a 30-day trial available.

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