A well-thought-out financial plan leaves more money for retirement

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Pay yourself first as part of your budgeting system.

Twenty years ago this month, I made a substantial career change from journalism to the world of investing.

I had just enough mindful money to make the switch, but far from having a thorough sense of personal finance, let alone the technicalities of managing investments.

I can’t fully cover 20 years of learning and insight here, but what follows are fundamental ideas that I’ve found important when making financial decisions. With proper attention, these ideas could improve your financial security without having to master statistics and probabilities, investment strategies, taxes, and the larger jumble of numbers and data.

When determining your budget, pay yourself first by intentionally saving and investing, not last by saving only what’s left over after spending each month. It prioritizes building financial security over building a lifestyle.

Do not submit any employer correspondence in your company’s retirement plan. This is a 100% risk-free return on your savings that you can’t get anywhere else.

No one plans to fail, but many people don’t plan. Understanding your current situation and its relationship to where you want to be in the future will help you focus on your options for bridging the gap between the two.

There is no single financial plan. You need to build your plan around your needs, wants, and wishes on your timeline, with your values ​​informing your decisions. This is why we talk about personal finance.

Invest in yourself. Improving your knowledge and experience can earn you a salary above your cost of living. This will allow you to save more, pay off your debts faster and accelerate your search for financial security.

Humans are not good at making complex, emotional decisions. The impact of your biases and behaviors regarding saving, spending, and investment choices is significant. The tug of war between fear and greed will always influence your investment decisions.

Money only buys happiness up to a basic level of financial security. After that, people who seek happiness through money are often left unsatisfied in the pursuit of more. Understanding what is enough for you is a high level of enlightenment.

Trying to predict the direction, pace or momentum of investment returns, inflation or interest rates is a wild ride.

Compound returns on investments are mathematical magic that cannot be replaced by trying to time when to be in or out of any investment.

Investing is like building a snowball. It takes effort to get started and the first results may not be impressive, but the growth accelerates the longer you stay there.

Complex and highly designed strategies are rarely better. Keep the majority of your investment approach simple enough to explain to your less financially savvy friend.

Build an investment portfolio that doesn’t require constant attention. The less you have to check, the better your returns will be, because you won’t be tempted to tinker as often.

Headlines that attribute gains or losses to a single cause are rarely correct. Investment results are usually determined by a complex combination of many factors, some rational, some irrational.

Most investments have a wide range of potential results, some very good, some that will destroy your desire to hold on when they underperform your expectations.

Whether you’re a conservative investor or an aggressive investor, the best portfolio for you is one that you can hold when investment markets reach extremes.

Over time, a thoughtful plan and decision-making process will be more important than luck. In the short term, you will see luck-based results that will tempt your commitment to your process.

If you have a truly diversified approach to investing, you currently own something that isn’t performing well, and that’s okay.

Rather than finding specific investments that become big winners, avoiding losers is more important for most people.

Your rarest and most valuable asset is your time.

Giving even a little money will make you happy. Be charitable.

Everyone has a will; it’s just that for most people, the state wrote it for them. Unless you have no money or dependents, you need a will, health care directive, and power of attorney for financial and medical matters to communicate your wishes.

Few people need permanent life insurance. Many more people need term life insurance to cover their debts and obligations should something happen before they achieve financial security.

Use debt to finance things that are expected to increase in value (houses, education) and not much else.

Letting the daily financial media influence your decisions defeats the purpose of having a documented financial plan and investment strategy.

Nobody complains about a minimalist life centered on the essentials. Collect less, experience more.

Gary Brooks is a Certified Financial Planner and the President of BHJ Wealth Advisors, a registered investment adviser in Gig Harbor.