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The end of the year comes with a rush. As the clock counts down, you’re confronted with two diametrically opposed feelings.
On one hand, you worry there’s not even time on the chronometer for you to squeeze in those last-minute year-end tax strategies. Should you take that loss in this tax year or wait for the traditional January bounce? Or will the ongoing Santa Claus Rally turn that loss into a gain? Oh, if only the year would never end!
On the other hand, you just can’t wait for it to be all over. You want to be past the point of having to make a meaningful decision. You want to relax. You want the comfort of knowing you have all the time in the world to ponder your next move. You want the year to end right now!
For all our wants and fears, time does march forward. It’s dependable in that way. Not only can you rely on it, but you can use it to your advantage.
Here are three “timeless” tips you can take advantage of as the calendar turns over from 2019 into 2020:
#1: Resolve to Dream Your Dreams
Life coaches will tell you the first step to living your dream is to dream it in the first place. This applies to short-term goals, too. Once you visualize them, you can begin to implement strategies to achieve them. For many, this involves stowing away cash. For some, setting aside funds to reduce loans.
“Another year to save to help you get closer to your goals,” says Daniel P. Lash, a partner at VLP Financial Advisors in Vienna, Virginia. “Most importantly, create goals for paying off debt, renovating a kitchen or bath, buying a new car or home, paying for college, retirement, etc… Knowing what and how much you are saving for makes it far easier to save and that is why creating a plan is so important.”
When it comes to saving, 2020 offers a chance to accumulate a little more. “There will be slight increases to the amount allowable that one can contribute to a 401(k) account,” says Jeffrey Benowitz, of Certified Financial Services and Guardian in Paramus, New Jersey.
Here’s the most significant part of this tip: think big. Don’t get bogged down in the minutia of everyday life. As important as it is to pay off your loans and put food on your table, you should allot at least a small portion of time to plan your future.
“It’s important to answer the question, ‘How do you imagine retirement?’” says Brian Madgett, Head of Consumer Education for New York Life in New York City. “Defining this wish list is essential when it comes time to sit down and think about how much money you’ll need in retirement and how you will receive it, whether through guaranteed income streams or a variety of investments (or a combination.) The ability to anticipate what your regular expenses will be, in addition to those ‘wish list’ items, will better prepare you to contribute and accumulate accordingly.”
#2: Remember, the Markets are Resilient
Sooner or later, the sky will again appear to fall with regard to the markets. It happens all the time, whether you remember it or not. And when it doesn’t happen for a long time, then the smallest little raindrop will feel like the heavens collapsing.
“2020 is analogous to the clarity of hindsight,” says Michael Gerstman, CEO of the Dallas-based retirement planning firm, Gerstman Financial Group, LLC. “We have seen wars, recession, depression, Pearl Harbor, 9/11, the financial crisis and the S&L crisis. The financial markets are resilient and America’s greatness has always provided financial security for those willing to save and invest.”
Even if you’re worried about the length of the current market run, don’t let that worry get the best of you. “Based on historic market cycles and documented performance, there is still 30% to 40% additional upside in this market,” says Dr. Guy Baker of Wealth Teams Alliance in Irvine, California. “That does not mean there will not be a downturn along the way. But I would expect the market to continue to grow for another couple of years before a severe downturn will halt this bull market.”
#3: January 1st Resets Everything
Perhaps the best thing about the start of the new year is that it erases the blemishes of the previous twelve months. Once January 1st strikes, your tab returns to zero. You can begin anew.
“I like that the beginning of the year offers hope,” says Dan Pallesen, a Licensed Clinical Psychologist and Chief of Investor Behavior at Keystone Wealth Partners in Chandler, Arizona. “No matter what mistakes we have made in the past, those can be wiped in our minds and we can have a fresh start (these moments that offer a fresh start are called temporal landmarks). This is the same when it comes to saving money. If you were one of the many Americans that panicked at the beginning of the year and lost out on potential growth, that is now a thing of the past and you get to start this new year with a clean slate. Create a savings plan for the new year and beyond!”
The year 2020 will be a leap year. Use it as a springboard to leap ahead when it comes to your own goals and dreams.