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52 MILITARY OFFICER JANUARY 2017 Taking Control
Succeeding as an investor isn’t as diffi cult as most people think, but it requires taking responsibility and control of your fi nancial future. By Lt. Col. Shane Ostrom, USAF (Ret), CFP®
As you might expect, an overwhelm- ing majority of people who join a uni- formed service do not retire from their respective service. In fact, only about 18 percent of all retirees in the U.S. receive a pension, which means most people have to rely on their investment skills to retire comfortably. Social Security ben- efi ts never were meant to provide a com- fortable retirement, only supplement it. Investment data collected by fi nancial re- search fi rms indicate most Americans are not succeeding at the etirement savings mission
succeeding at the retirement savings mission.. Analysis from 2014 by DALBAR, a fi nancial services market research fi rm, indicates that over 10 years, investors are 1.5 percent behind Standard & Poor’s (S&P) 500 index in average annual return. Over 20 years, the diff erence is 4.2 percent, and over 30 years it’s 7.4 percent. Starting with $10,000 over 30 years, the diff erence is $235,190 for the S&P 500 and $29,740 for investors.
To succeed as an investor is not diffi cult
— you can do this. To start down the road to investment success, you must assume responsibility and control over your future. Living for the present day, to the detriment of the future, is a signifi cant setback under the fi nancial rules of engagement. In addition to adopting a future focus,
you must recognize the widespread messaging we receive daily is a form of destructive indoctrination. As I see it, the fi nancial service industry and the media do not properly educate con- sumers on how to invest and create wealth.
Financial fi rms need us to be their clients, and the media needs market share to thrive. In an information vacuum, marketing, mis- information, and even downright bad ad- vice can outshout rational information. Messages about house-fl ipping schemes,
lotteries, precious metal speculation, penny stocks, life insurance strategies, trading sys- tems, playing the market, stock options, and conservative savings programs will not lead to success. Too many of us are looking for a get-rich-quick plan. No such plan exists, even though daily messages keep telling us an easy way to achieve wealth is out there. Even daily updates on the natural volatil- ity of the markets (the Dow Jones industrial average is up or it’s down) plant the idea that we need to be doing something all the time and suggest that investing means tak- ing action. This message is not helpful. To succeed in investing requires a
little knowledge and a lot of discipline. To paraphrase investor Warren Buff ett (as you’ve seen me do before), the risk is in what we don’t know. We are smart people, and we just have to apply some of our en- ergy and time to our fi nancial futures. Explore the MOAA fi nancial blog
(
moaa.org/fi nanceblog) to build your knowledge base further. MOAA is a source of impartial knowledge.
MO
— Lt. Col. Shane Ostrom, USAF (Ret), is a CFP® and benefi ts information expert at MOAA. Visit
moaa.org/fi nancialcenter for other resourc- es. Email specifi c benefi t and fi nance inquiries to
beninfo@moaa.org.
PHOTO: SEAN SHANAHAN
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