The Money Tree, and Other Financial Myths


Military members face a complex web of pay, allowances, benefits, and bonuses. Too often, doubt and confusion about money matters can get in the way of financial progress. Here, we set the record straight on some common money myths.

MYTH: Financial planning is all about investing.

Reality: Investing is one building block toward meeting long-term financial goals. But there's much more to a solid financial plan. Budgeting for daily expenses, maintaining the right insurance coverage, and making smart tax decisions are just as important. A CERTIFIED FINANCIAL PLANNER can help with all of these areas.

8 Financial Planning Myths

  • Investing equals planning
  • Financial advice is expensive
  • Estate planning is for rich people
  • I don't have enough money to start investing
  • I have time to save for retirement
  • There's a secret formula for beating the stock market
  • My landlord's insurance will protect me
  • Saving for college comes first

MYTH: I can't afford financial advice.

REALITY: Guessing can cost you much more than paying for professional help. And financial advice doesn't have to be expensive. Some financial services companies will answer basic financial questions for free, or create a base plan for as little as $200. Paying a few hundred dollars now can be a bargain to ensure your financial choices pay off in the long run.

MYTH: Estate planning is only for rich people.

REALITY: Individuals of all income levels should consider drafting a will. And if you have children, the will should designate who will serve as their financial and physical guardian. A durable power of attorney, medical directive and letter of instruction also can help your family handle your affairs in the event of your death or disability. The JAG office can help military members create these documents for free.

MYTH: I don't have enough money to start investing.

REALITY: You can open a mutual fund account for as little as $20 per month. Starting early is key. Over time, the power of compounding returns can help your modest contributions grow. For example, if you invest $20 a month for 20 years and earn an eight percent annual return, you'd have $11,859. After 30 years, you'd have $30,006.

Whether saving for college, planning for retirement, or starting a family, a plan is your ticket to achieving financial security. Just call USAA at 1-800-358-0995 for advice tailored to the military community. Or log on to, and click on the "Financial Guidance" tab.

MYTH: I have plenty of time to save for retirement.

REALITY: As life expectancies get longer, future retirees will need much larger nest eggs so they don't outlive their savings. Building a retirement fund could be the largest financial commitment you'll ever make. So starting as early as possible could help you take advantage of compounding returns.

MYTH: There is a formula for beating the stock market

REALITY: No one can predict what the stock market will do. A winning investment strategy involves maintaining a diversified and disciplined approach to weather the ups and downs of the market over many years. Professional advice may help, but it's no substitute for a long-term commitment to systematic investing.

MYTH: My landlord's insurance will protect me.

REALITY: If a fire, burglary, or other unfortunate event occurs, a landlord's insurance usually covers damages only to the building itself. This means tenants must replace their own belongings. So if you don't own your place, you probably need renters insurance (also called personal property insurance). That includes service members in government housing.

MYTH: Saving for my kids' college tuition comes first.

REALITY: Parents should save for their own retirement before the kids' college expenses. Loans, grants, and scholarships can help pay for college, but retirees have far fewer options.

Separating fact from fiction is an essential step toward building a sound financial plan. And with the truth on your side, turning plans into action may be a little easier.

Choosing a Financial Planner

Financial advisors are not all the same. Ask these two important questions when interviewing a financial planner:
  • Is he or she a CERTIFIED FINANCIAL PLANNER? practitioner? This means the planner has passed rigorous testing and agreed to adhere to high ethical standards. CFPs also must satisfy annual continuing education requirements.
  • Is the planner paid a salary, with a flat fee for service, or does he or she earn a commission? Commissions could influence the financial products the planner recommends.

Working with a credentialed, financial planner, you can feel confident the advice is in your best interests.

Richard Nash is a salaried CERTIFIED FINANCIAL PLANNER practitioner with USAA Financial Planning Services, one of the USAA family of companies. A retired officer of the U.S. Air Force, Nash served for 21 years on active duty. USAA is a diversified insurance and financial services organization that has served the military community since 1922.

Systematic investment plans do not assure a profit or protect against loss in declining markets.

USAA Financial Planning ServicesSM refers to financial planning services and financial advice provided by USAA Financial Planning Services Insurance Agency, Inc. (known as USAA Financial Insurance Agency in California), a registered investment adviser and insurance agency, and its wholly owned subsidiary.

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