By Haddon Libby

New Year’s resolutions – nearly half of us make them yet only one in ten keep them.  The most common resolutions relate to improving one’s health, wealth and happiness. 

One resolution that most of us could benefit from but few consider involves improving our finances.  Poor finances consistently show up as one of the primary causes of stress, relationship issues and substance abuse.  In fact, last month the American Psychological Association released a report called Stress in America that confirmed that money is a primary cause of stress for most people.  Financial worries cause 36% of people to feel anxious while 35% behave with anger and 34% feel tired or fatigued as a result of financial matters.

Unless your finances are so good that money is not a factor in your life, think about starting 2018 with some financial planning.  If you want to avoid feeling overwhelmed by this exercise, break your financial goals down into smaller pieces. 


Start by focusing only on 2018.  While thinking about your finances, consider where are you now and where would you like to be this time next year.   If your job pays you less than you believe that you should earn, answer this question: ‘Is there another job that you would like to do that you are qualified for?’  If your answer is yes, formulate a plan that gets you into that new job.  If your answer is no, think about what you most enjoy doing that pays more than your current situation.  From there, you can develop a plan that will help you get into that occupation.  This might require more education or a job change that might not pay more now but has great prospects for the future.  Think about this as your short-term plan.  Write it down and check your progress from time to time.

Once you have set a plan of action for 2018, think about your needs and goals for the next three to five years.  Do you want to buy a house, a new car, child’s braces, higher education or simply get your debts cleared up?  Think about the path toward achieving these things and write it down.  This is your medium-term plan.

With short and medium term needs and goals outlined, work on your path to retirement.  Let’s face it, social security is barely adequate for today’s retirees and benefits are not likely to get better given the ever increasing deficits incurred by the federal government.  As such, you need to begin planning early unless you can count on a large inheritance. 

How much should you save?

The average income per household in Riverside County is approximately $5,000 per month, a 40% increase from thirty years ago.  If this trend continues through 2050, a household will need to earn $7,000 per month to maintain the $5,000 a month lifestyle that they have today.  This means that you will need to save more than $1 million to maintain a $60,000 a year lifestyle.

 If you have 30 years until retirement, you will need to save $1,000 a month and get an annual return of 7% to maintain that $60,000 a year lifestyle.  If you have twenty years left to work, you will need to save $2,400 a month.  If you wait until you have only 10 years left to work, good luck as you will have to put away $7,000 a month.

As financial planning is something most people struggle with, find yourself a financial advisor who is also a fiduciary and discloses every penny that they or their firm make.  Remember that advisors who are also brokers often embed extra fees in ways that are hard if not impossible to identify.  Stay away from any person or firm who will not put every penny that they charge in writing in font sizes that do not need a magnifying glass.

Haddon Libby is a Managing Director, fiduciary and founder of Winslow Drake Investment Management ad can be reached at 760.449.6349 or  For more information, please visit