The song “Auld Lang Syne” is derived from a famous Scot’s poem which is played with the start of every New Year. The title may be translated into English literally as “for the sake of old times.” While old times and good friends should not be forgotten, neither should your own financial resolutions.
When hearing this song at the stroke of midnight, many of us may reflect on where we stand with our job, life, health, money, retirement, family and relationships. Maybe there is something to be said about the urgency of the clock counting down and the calendar turning over to the next year.
The items that top most New Year resolution lists are typically led by eliminating bad habits to possibly starting new endeavors. We all know the usual suspects: stop smoking, drink less, lose weight, watch less TV, be less stressed, stop overspending, reduce clutter, get a better job, join a gym, read more books, start a new hobby and take a vacation appear on many lists.
The fact that most financial resolution checklists have very limited financial “to-do’s,” should not come as a surprise. A past study by Allianz Life found that 84% of adults left financial planning off their list entirely.
Getting your financial life organized and up to date takes time, patience and hard work. Do not expect to cruise through life while assuming your financial goals will somehow miraculously be met before or during retirement from hitting the lottery or can be put on a credit card.
As our world becomes more interconnected from the “sharing” to the “gig”-economy, “staying ahead of the curve” may involve a different way of thinking no matter what your age. A 2018 study by Intuit predicted that by 2020, 40% of workers would be independent contractors. We seem to be heading rapidly in that direction.
From freelancing (in any industry) to setting up your own shop and incorporating, the sharing economy, sometimes also called the “collaboration economy,” is taking off in all sorts of niches orchestrated by big data and the internet of things (IOT).
No matter your age, occupation or future calling before or after you retire – from law, nutrition, accounting, creative design, home repair, real estate, food, health related services to pet care – getting “tech-literate” is essential. Today’s “new” office places greater emphasis on your website, social media presence and digital footprint than just your brick and mortar location when working to establish and maintain your brand and clientele.
1.Develop a “side-hustle” you are passionate about -before and after retirement.
2.Don’t be afraid to flex your entrepreneurial skills in today’s “gig- economy” and be your own boss.
3.Become “tech-literate” as tech will continue to integrate into every part of our lives.
4.Master “financial literacy” and education- and pass along to future generations- as it’s not taught at home or in college.
5.Stay active as you age. Your health effects your wealth and your wealth effects your health.
6.Track your financial goals, household cash flow and assets autonomously with an app like Mint or e Money.
7.Develop a disciplined money mindset in today’s “instant gratification” society.
8.Don’t financially compete with friends on social media. It’s not a competition!
9.Live within or below your means to help get – and stay rich for potentially a 30+ year retirement.
10.Refinance down any debts or obligations over +6% to a low fixed rate while you can.
11.Check your credit report three times per year for free. (Equifax, Experian and TransUnion)
12.“Freeze” your credit online to help mitigate identity theft and fraud.
13.Decrease your pay-stub exemptions if your tax-refund is over $2K. Don’t tie up cash interest-free for the year!
14.Multiply your (age times your income) & divide by 10 to benchmark your net worth. (Millionaire Next Door)
15.Target 15X the average of your last 5 years of salary for your retirement nest-egg savings number.
16.Limit your retirement income distributions to 4% or less of your portfolio while staying diversified.
17.Subtract (100- your age) & invest the difference in stocks- as benchmark for your asset allocation.
18.Implement a portfolio (and 401K) audit at least quarterly for strategy, costs and performance.
19.Don’t chase performance, star-ratings or published “best-of” lists when selecting active or passive investments.
20.Don’t invest in anything you don’t fully understand. There is no such thing as a free lunch!
21.Don’t chase high income or high return investments or products. (see #20)
22.Don’t follow the herd. By the time you hear about something good, its often too late.
23.For every buyer there is a seller on Wall Street.
24.Don’t let feed and greed dictate your investment decisions.
25.Plan wisely today for your tomorrow. You can’t put your retirement on a credit card.
26.Envision your “future you” in retirement. How will you look and feel 10 or 20 years from now? Write down your goals outside the numbers from your health to wealth goals.
27.Develop a road map to know where you are going (a financial plan) and benchmark annually. Utilize an accredited advisor!
28.Be accountable. What gets measured gets done.
29.Use employer bonuses and tax returns wisely. (Pay down debts, increase you savings.)
30.Don’t invest more than 10% of your liquid investments in any one individual stock.
31.Maintain 12 months of cash reserves for emergencies and short term goals.
32.Overcome procrastination, fears and excuses.
33.Don’t enroll in Social Security at age 62 unless necessary.
34.Absolutely do not take a loan from your 401K!
35.Put your savings goals on “automatic”-save 15% of each paycheck.
36.Don’t leave a “free” 3%-5% employer retirement plan match on the table.
37.Eliminate debt over a set time-period. Extra mortgage and car payments can shave off thousands in interest due.
38.Protect what’s important with insurance (life, disability, long term care, home, auto, health) and estate planning strategies.
39.Review your cable and other household recurring bills and look for ways to cut back on services you are not utilizing.
40.Put your home on “automatic” to save energy and money. (nest thermostat, smart sprinklers, pool, etc.)
You cannot invest directly in an index. Past performance is no guarantee of future returns. Diversification does not ensure a profit or guarantee against loss.
The information given herein is taken from sources that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without Ulin & Co. Wealth Management’s or IFP’s express prior written consent.