As we continue to work our way out of the nation’s recent economic turmoil, attention is beginning to shift from immediate concerns to more long-term challenges. We saw signs of that shift in January, when Fed Chairman Benjamin Bernanke advised lawmakers that the economy is improving but steps should be taken now to stabilize and improve it –including developing a long-term plan to reduce the trillion-dollar budget deficit.
“It is widely understood that the federal government is on an unsustainable fiscal path,” Bernanke told the U.S. Senate Budget Committee. “Yet, as a nation, we have done little to address this critical threat to our economy. Doing nothing will not be an option indefinitely; the longer we wait to act, the greater the risks and the more wrenching the inevitable changes to the budget will be.”
Looking beyond our current unemployment and mortgage troubles, what is our government’s biggest fiscal issue? I submit it is entitlements. Over the next two decades we are facing a $7 trillion predicted deficit in the Social Security program. Now multiply that figure by four -- $28 trillion. That’s the predicted deficit of Medicare, which at the present rate will be in bankruptcy later this decade. Those numbers have been known for years. Now it’s time to start dealing with them. And we will be doing so for years to come, possibly decades.
But perhaps the most important fiscal crisis we face – the one that underlies all of the other crises – is our individual financial behaviors. We’ve learned a lot about ourselves during the recent economic downturn. Many people have taken a hard look at their personal finances and in the process rediscovered the importance of frugal living, of saving more and spending less. Still, we have a long way to go. We need to face the fact that we still live in a consumption-fueled economy, addicted to the opiate of consumerism.
You see this addiction every day in your own communities and neighborhoods. You know people who can’t pay off their credit cards. You have friends who aren’t saving for retirement. You have neighbors who bought homes bigger than what they could afford to pay. You work alongside people who don’t even think about their insurance needs, leaving their families dangerously unprotected in the event of a long-term disability or death. And you know people who don’t have money in the bank.
These people need help. They need coaching—long-term financial coaching. That’s what we do at First Command, and it sets us apart from the rest of the industry. Too often in the financial services world discussions with consumers focus on investment vehicles, strategies, asset classes, rates of return – the tools of the business. Those are important matters, to be sure, but they are not the most important issue. The great problem faced by American wage earners and their families is not that they have put their money in the second best investment product. Rather, they do not save, invest or prepare for financial security in any regular or meaningful way.
We believe that managing the risks that can threaten your financial well-being is every bit as important as saving and investing toward your goals. So we start with an effective insurance strategy. It is a part of all of our financial plans. Insurance is the tool that helps you to continue to pursue your goals in the face of an unexpected event. Like a careless driver who broadsides your car. A disability that prevents you from working. An extended stay in an assisted living facility. Even the death of a loved one.
As a First Command client, you know our process well. We work with each of you, identifying your risks and other uniquely personal needs and addressing them through a broad range of products and services. Investments, insurance, banking. But most importantly, we offer these products and services within the context of a financial plan. We serve you through a holistic approach that addresses your changing financial needs, goals and priorities as you move through the different stages of your life.
We are agents of change. Your First Command Financial Advisor is your fiscal coach, the personal trainer who is dedicated to helping you change your financial behaviors so you can realize your long-term goals and dreams. Our job is to help you identify what is most important to you and inspire you to pursue a secure, abundant and fulfilled life.
As our nation begins to deal with its long-term fiscal challenges, I urge each of you to take a look at your own financial future. Are you on track to realize your goals and dreams? To borrow a phrase from Benjamin Bernanke, “doing nothing will not be an option indefinitely.” If it’s been a while since we talked, give us a call. We’re ready to help.
First Command Financial Services, Inc.