The Contractor: A Tale of Resilience and Financial Transformation
Many years ago, following a recession, a local CPA referred a contractor. This individual, a sole proprietor with one part-time employee, had struggled during the economic downturn. The CPA sought my assistance in crafting a comprehensive plan for his retirement and preparing for potential future downturns. Although a skilled contractor, he needed to gain experience in financial planning.
We embarked on creating a financial strategy, starting with setting up a small account to build his emergency fund. Concurrently, we established a Roth IRA and a retirement plan, gradually funding both each year. During prosperous times, he contributed to his emergency fund and retirement plan. When the significant financial downturn hit in 2007-2009, leaving him with no business, he reached out, expressing the challenge of a three-month work hiatus while still needing to cover bills.
Fortunately, his emergency fund had grown into a substantial safety net. We provided him with enough funds to meet all his financial obligations and maintain a cushion. As business improved, we resumed replenishing his emergency fund and continued contributions to his retirement plan. A decade later, when he faced a six-month work hiatus due to a back injury, his emergency fund had been rebuilt, allowing him to navigate the period without working comfortably.
This story underscores the importance of planning. Today, he is retired, occasionally engaging in side work and relishing his life, including regular trips to Cape Cod during the season. It exemplifies the transformative power of building a comprehensive financial plan with a planner as your guide.
