Kevin Bourke is the founder of Bourke Wealth Management and has worked in the financial management field for over 25 years. A former financial advice columnist for The Santa Barbara Independent, Bourke published his first book, Make Your Money Last a Lifetime, earlier this year. In it, he offers advice on topics ranging from investment tips to detecting scams. The Independent sat down with him recently to discuss his latest work.
What is the biggest mistake a person will make with her money in her lifetime? Listening to the wrong person. It might be the talking head on TV who doesn’t know anything about the person’s individual situation and is really just trying to get publicity for them or their firm. Or it might be their well-meaning parent who may have gotten rich being self-employed or being a CEO of a big corporation that doesn’t necessarily translate into investment acumen.
What can you tell people about finding someone who they can trust to be responsible and reliable with their money? I would say that talking to your tax preparer is a good place to start. I work with lots of tax preparers here in town because when my clients come to see me they already have one they’re working with. Talk to your CPA and your tax preparer and get their read on who they suggest and who they trust since they already know you as a client and they have an understanding of where you’re coming from financially.
I am biased because I am a CFP [certified financial planner], but I feel it’s a good idea to research the CFPs that are available to you, and don’t hesitate to look up their records and reviews from other clients. That will give you an accurate reading of how well-liked they are and what kind of job that particular advisor has done in the past. So you go through and filter the tax preparers and the CFPs and pick out which feels best to you. The next thing I would look for is the person’s years of experience. Oftentimes someone who has five or even 10 years of experience hasn’t been through all the cycles that exist in the business. Five years is not enough, 10 years is questionable, but 15 years makes me feel a lot better.
Finally, I would ask about their disciplinary record. If you find an advisor’s record with page after page after page of complaints, that’s going to be a problem.
What advice would you give to someone who has just graduated college in this economy? The single most important thing is to begin the practice of paying yourself first. Putting at least 10 percent of what you make every month in the bank. The problem is, when you’re 22, you think, “How can I afford to pay myself first? I can barely make my rent.” However, if you made a hundred dollars less than you do a month, you would still live. If you made $300 a month more, are you going to put that in savings? Probably not. There are always reasons not to invest even the 10 percent. If you can get in that habit in your twenties, by the time you’re in your mid-fifties you won’t have to work anymore.
The biggest mistake is when young people spend their paychecks. I would be tickled pink if I could get everyone to start putting away 20 percent of their paychecks once they start bringing in a monthly paycheck.
I understand you have taught classes for Women’s Economic Ventures, and I’m curious if you’ve noticed any differences in how men and women spend their money. It’s interesting that you ask that question because I work with a lot of married couples. If I were going to stereotype, I could say that for women, the need for security is typically greater than it is for men. For example, let’s say that you own a $500,000 home, you owe $250,000 on it, and you receive an inheritance check for $250,000. Typically, the man will say, “How can we invest this and make it grow in the shortest amount of time?” Whereas the woman will want to pay off the house. Women tend to like that feeling of security more than men. That is changing, but if you asked me, I would say that women tend to be more conservative than men.
Women are often more inclined to enjoy life with their money. They’re typically more likely to spend money on experiences like travel or nice meals whereas men tend to want to spend money on cars or a TV.
Bourke just finished updating his website, bourkewealth.com, which lets visitors seek helpful, educated financial advice. “I want to provide value to people’s lives,” said Bourke, “whether they are clients or not.”