If You Fail To Plan, You Are Planning To Fail.

Making New Year’s resolutions to improve your financial wellness in 2024? 

Do they look familiar to last year’s?  

As Ben Franklin repeatedly said, “If you fail to plan, you are planning to fail”. 

Let’s help you start by recognizing questionable resolutions, including three destined for failure plus what should be considered for successful planning outcomes. 

Bad Resolution: Need to start buying “X” to grow my money.

Before buying “X”, how does fit into your investment strategy within your financial plan? 

Over the last 4 years, crypto, I bonds, meme stocks and cash have had their shiny object moments with investors chasing. 

If to start 2023 one moved their investment strategy to cash based on 2022 performance of stocks and bonds, well… past performance is no guarantee of future results.   

Yes, interest rates rose, and one could find ~4-5% CD’s. Yet, through December 15, 2023 on Year-To Date returns, several equity indices have significantly outpaced, and certain bond indices have done as well or better.   

Recall as treasury yields fall in anticipation of Federal Reserve action and/or economic outlook, bond funds and ETFs participate in this inverse relationship - interest rates fall, bond prices rise. When bond prices rise, this increases the value of bond funds/ETFs. Just like in 2022, when rates rose, value of bond funds/ETFs fell. 

Better Resolution: Need to save ___% and take ____ risk with investments to reach ____  goal. 

To truly build assets, you need to save a specific percentage each year, take opportunistic or measured (less) risks AND invest towards your established goal(s), not performance that occurred the year before or one market benchmark.  

Bad Resolution: Pay down debt. 

Sounds important, but is it? It depends. Tax deductions, interest rates, duration, fixed or variable, inflation, deflation, depreciation, and impact to your future cash flow ensure all debt is not equal. 

Better Resolution: Execute a debt reduction plan. 

Access all debt, then prioritize on high-interest debt, variable rates, and unsecured. If down to a 3% or lower mortgage, 2% auto loans, and a MassSave at 0%, then maintain required payments, reap benefits of low, fixed rates in an inflationary environment and allocate towards investments outpacing those rates over time. 

An exception, if not at ~40% home equity ownership, can make a case to get there and open a  HELOC. Beyond flexibility to access equity built and lower total interest paid, can eliminate the opportunity costs of a large cash position for the “what ifs” in life.

Bad Resolution: Do more for my retirement.

Buy a lottery ticket, as greater chance of success than this vague “lose weight” resolution tossed by January 10th. 

Better Resolution: How do I retire at 55 or semi-retire in 5 years. 

Now you’re analyzing cash flows, balance sheet, contribution rates, investment allocations, taxation, work benefits, college funding, planning for the unexpected and desired lifestyle with expenses in retirement. You’ll establish a set of base facts, allowing to then create scenarios, see projections, reverse engineer action steps, and track goals within timelines. 

Aggressive timelines create urgency, leading to actions that bring you closer the ultimate retirement accomplishment - choice.  

Now ask yourself, are your resolutions the same as last year? 

What different actions are you going to take to make a difference? 

Know what Einstein said about doing the same thing over and over and expecting different results. 

Maybe it’s time to socialize your goals, set monthly action items to create fresh start moments and leverage an accountability partner (i.e. Certified Financial Planner) to make your 2024 resolutions happen.  

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Glenn Brown is a Holliston resident and owner of PlanDynamic, LLC, www.PlanDynamic.com. Glenn is a fee-only Certified Financial Planner™ helping motivated people take control of their planning and investing, so they can balance kids, aging parents and financial independence.

This article appeared in the April editions of Local Town Pages for Holliston, Natick, Ashland, Franklin, Hopedale, Medway/Mills, Bellingham, and Norfolk/Wrentham. Additionally in 1st weekly edition of Community Advocate for Shrewsbury, Westborough, Northborough, Southborough, Grafton, Marlborough, and Hudson. 

Please call me at (508) 834-7733 or directly schedule a meeting to learn more about considerations for planning and investing so you can balance kids, aging parents and your financial independence.

PlanDynamic, LLC is a registered investment advisor. This article is intended to provide general information. It is not intended to offer or deliver investment advice in any way. Information regarding investment services are provided solely to gain a better understanding of the subject or the article. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy will be profitable.

Market data and other cited or linked-to content in this article is based on generally-available information and is believed to be reliable. PlanDynamic, LLC does not guarantee the performance of any investment or the accuracy of the information contained in this article. PlanDynamic, LLC will provide all prospective clients with a copy of PlanDynamic, LLC’s Form ADV2A and applicable Form ADV 2Bs. You may obtain a copy of these disclosures on the SEC website at http://adviserinfo.sec.gov or you may Contact Us to request a free copy via .pdf or hardcopy.