Someone once said, “The problem in communication is the illusion that it has occurred.”

Every day in our practices, we are challenged to communicate complex financial concepts to our clients that we hope they understand. It’s easy to use industry jargon that will confuse rather than inform—correlation coefficient, standard deviations, Sharpe ratios, beta, Monte Carlo simulations, and confusing charts and graphs.

Why not use a simple carpenter’s ruler like this one to help clients understand some basics? [visual] This is 1 meter long, or 39 3/8 inches, about 40—like most clients’ careers, that is, 40 years. Use this as a proxy for your clients’ working years. I call it “By the Inch, It’s a Cinch!”

The problem is that people in their 20s don’t start saving for retirement right away; they buy cars, get married, pay student loans. They put it off even though we all know that early contributions to the plan are worth the most at retirement. This exercise may get them to start earlier.

In their 30s, many clients are starting businesses, buying homes, or perhaps expanding their families; the convenient time to save comes to no one. They put off saving even further.

Many of them want to retire early. In some cases, they want to retire a lot earlier.

It’s simply not enough time for returns to compound and be meaningful.

Clients can do one of two things: They can keep working, or they can start sooner. Who can start sooner than today? That’s right—no one. That ship has sailed!

And here is the main point. It does not matter how much they save; they just need to get started. The part that makes them successful is not the amount, but the habit of saving they develop. By the inch, it’s a cinch! It’s no different from the good habits we establish in our practices. If we have the habit of filling our calendar with appointments, we are on the road to success, just as your clients will be by establishing a savings habit early on.

Furthermore, tell your clients that there are only two ways to store money for future returns—they can either loan their money or own something. If you own, you take the risk, like owning a business, a home, a share of stock, or a mutual fund.

The only other way is to loan your money; a savings account at a bank is a loan to the bank, just as a fixed annuity is a loan to an insurance company. Over time, the return is lower but is likely guaranteed.

Starting early is the key to success, and it opens the door to early retirement. We help our clients decide to loan or own. Do their current plans or actions measure up?

Remember, by the inch, it’s a cinch! (By the yard, it’s hard.)

H. Richard Dobson Jr., CFP, is a 16-year MDRT member with one Court of the Table honor and the owner of Professional Brokerage Services in Cedar Falls, Iowa. He is an officer of American Financial Securities and president of American Financial Management. He has been a member of NAIFA since 1984, has served on the NAIFA–Iowa board of directors and formerly chaired the NAIFA National Investment Committee.