Seven reasons why 2021 will be the year financial readiness becomes mission readiness for you! Published Jan. 15, 2021 By Kevin Startt, ChFC Personal Financial Counselor(PFC) New Years is a great time to make a savings or financial plan despite adversity that you may be facing. Fidelity Investments has found that 67% of Americans consider New Year’s resolutions involving their finances and that includes the military. Half of those will fail but let’s dwell on those that succeeded and take a look at resolutions they crushed and you can crush in the year ahead with diligence and behavior leading to success and a better life. Follow strategies that you will love short term or long term. As legendary investor, Warren Buffet has said, “everyone knows who is swimming with their trunks off, when the tide goes out” After a 2020 pandemic year in which the tech driven NASDAQ, dominated by the Facebooks and Alphabets of the world exploded 44%, don’t make the mistake in your TSP or personal investment allocations, by assuming that the optimal strategy is the one with highest return. The biblical law that those “who are first shall be last and those that are last shall be first” applies to your allocation as well. Take a second look at International or the I fund. The TSP board certainly is in their lifecycle glide paths. Have a written financial plan with your advisor and if you don’t have an advisor, write it down. Ask yourself why you are allocated the way you are. Make sure you don’t have a lot of replication or duplication in your retirement plans and your personal investments. Make sure that, even with match in your TSP plan, personal savings and investments have zero capital gains consequences to a substantially high threshold. Retirement plans convert capital gains property, like Tesla, into ordinary income increasing todays or tomorrows taxes. Jot down the reasons why you would reallocate or sell your investments or funds as well. Check your beneficiary designations. It is very important that all of designations are current and correctly listed. Make sure that the designees recognize that they are in fact in the position they are in. Finally, pick up from your financial advisor or compile an estate checklist so that those you have named as beneficiaries know where to find the documents you mention. Be disciplined, not dogmatic. Even though, as I do, you have a list of favorite economist, portfolio managers, economists or investments, when you come across information that contradicts your views, do not assume it is wrong. Conversely don’t be so quick to change your strategy just because you hear of a strategy that is different than yours. Save Early, Save Often, and Pay off Your debts. One of the reasons, the afore-mentioned investor, Warren Buffet made 90% of his $82 billion fortune was that he recognized the incredible power of the eighth wonder of the world at an early age of 10 and started saving. As he made more money at different stages of his life, he used the principle of dollar-cost-averaging and buying cheap undervalued companies to amass a fortune. As Buffet’s millions grew to billions, his glide path to bigger billions got steeper. These are simple principles that any airman can achieve. He also avoided debt ever recognizing that the glide path toward debt works the opposite and can destroy and crush dreams the same way. Start an emergency fund and pay down your debt while rates are low in 2021 before moving on to investing your hard-earned money... Take a breath and never panic-Whenever your investments hit a rough patch, the temptation to sell becomes intense as we tend to hate losses even if they are on paper more than we treasure gains. Don’t let short-term events similar to what we went through last year affect long term investments. When they do, be a buyer or add to your investments, don’t sell panic or give up. Take a deep breath and proceed with plans. Rebalance your TSP and personal investments. If you do not have the fortitude to set up a schedule to do this with individual funds in your TSP, use a target date or life cycle fund to do it for you. With interest rates at all- time lows, the stock market at all -time highs, taxes at an all-time low and with incredible uncertainty, it is imperative for your recordkeeping now not later. Use a checklist like you would your oil and brake changes on your car and make this a habit to ensure that your plan matches your risk tolerance and vice versa as time goes on. In summary, be S-M-A-R-T. Set specific goals that you can measure and are accountable, realistic and have at time frame attached and 2021 will be the year you finally reach your savings goals!