OnPlane Financial Advisors
Do Well. Be Well. Financially.

Blog | Flat Fee Financial Advisor | Washington DC

I like to write about what happens in our lives and how it can relate to our financial lives. Not always but most of the time. So keep checking in. I'm glad to have you reading along.


“Put me in, Coach!”

“Put me in, Coach!”

Our youngest son, Sutton, is playing baseball again this season. The team is comprised mostly of 7 year olds. So far, we've had a few practices and two games. And let me tell you…they stink.

Seriously. They're not good. After our last game Jill said to me, "It's like watching The Bad News Bears."

And she's not wrong.

Before you start thinking "Wow that's horrible,” or “How can they say/think such things," hear me out.

First, I recognize they're only 7 years old. Also we have a few kids on the team that are new to baseball. And finally, we've only had a few practices and two games - a very small sample size.

But here's the thing: this is my tenth year coaching youth sports.

I see this each and every season. And as I tell my parents at the beginning of each season - especially at the younger ages - the improvement in each of the boys from the start of the season to the last game is leaps and bounds.

You can't notice it from game to game, practice to practice. But when you look back at the first game after watching the last game of the season, you really can see the improvement. Throwing and catching is better, fielding, hitting, base running. All of it gets better over the course of a few months. Why?


That’s the Japanese word for continuous improvement.

Earlier I mentioned throwing, catching, hitting, etc. Those are the basic fundamentals of the baseball. This is what the boys practice each and every week. If we only played the games, the boys would hardly improve at all. Some of them would get better, but not enough to notice a difference in just a few months.

And in all of the rec (not travel) sports I coach, we practice 1x per week and for roughly an hour. Admittedly that's not a lot of time to develop mastery of a skill. But we're not looking for mastery. We're looking for improvement.

Your financial life is no different. If you want to develop mastery over your financial life, you have to devote a LOT of time to it. It has to be a priority. If you don't want to devote a lot of time to managing your financial life, find a "coach." I happen to know a pretty good one ;)

Just as you can't see the improvement in the boys from game to game, practice to practice, you generally don't see much change to your balance sheet or net worth over smaller periods of time.

“Whoever wants to reach a distant goal must take small steps.” — Helmut Schmidt


Let’s take a look…

Say we have $100,000 to invest and we're able to save an additional $1000/month into the account. After only one (1) year, our money grows to $117,396* (assumes 5% compounding interest rate).

Evaluating the change to our balance sheet or net worth here is fine.

But it would be the same as checking in on Sutton's team after only a couple of practices. I think we can all agree this isn't a huge change after only one year. In fact, it's a little over $5000 of growth.

Let's fast forward five (5) years, same scenario. We continue to sock away $1000/month and we keep getting that hypothetical 5% compounded rate of return. Now we're up to almost $200k. Not too shabby!

We're getting better, our balance sheet is improving AND we're doing pretty good at work. Again, a small time frame and the improvement is there but we can’t really see it, and we certainly don’t feel it - not in the grand scheme of things like, say, retirement.

Now in Year 6 we’ve gotten a raise and we bump our savings up to $1500/month.


BTW this is more improvement in a different area of our financial life - increased rate of savings!

So we have $196,341.95 in our hypothetical investment account. We're putting in $1500/month and we'll get the same 5% compounded rate of return for another 10 years…drum roll.

Hey hey, now we're cooking with gas! After 15 years we're up to just north of $556,000.

“Compounding is the greatest mathematical discovery of all time.” — Albert Einstein

Life is going swimmingly for us. Maybe we've been promoted a few times and gotten a few more raises/making more money. And now starting in Year 16 we're able to save $2500/month. We're still earning that hypothetical 5% compounded rate of return, too.

30 years.png

And just as before we're again making more improvements to our rate of savings.

Fast forward to Year 30 and we have nearly $1.85m in our investment account.

Boom! From $100,000 to $1,850,000. Didn't happen overnight. We didn't see it happen, but it did. And it happened with discipline, consistency and a little extra work.

Basic fundamentals like saving, investing, and increasing our rate of savings.

It can be challenging to see the light at the end of the tunnel - retirement, or financial freedom, or whatever your goal is. For some of you reading this, it could be more than 30 years away. Who can even imagine what life will look like 30 years from now?

Not to mention a big, audacious goal looks VERY scary to our brains. So we go full Ostrich.

It won't happen if we don't keep working at it. If we don't keep contributing. If we don't keep increasing our rate of savings. Sure, we could keep saving the same $1000/month for 30 years. That grows to a hypothetical $1.28m.

By working on improving our rate of savings from $1000/month to $1500/month and then to $2500/month, we have nearly 50% MORE MONEY after 30 years. And that, my friends, is real improvement. That’s our KAIZEN.

You can't see it today. You can't see it in 5 years. But if you keep at it, keep working at it, you'll look back at some point in the future and see the improvement.

Just like my little guys on the diamond will.