My Five Truths

John Goodell

MANY MEMBERS OF THE military live in a crisis-like state. They’re frequently deployed to dangerous places. Their families often have to move every few years.

Today, that sense of crisis is shared by many others. In fact, with 23.1 million Americans unemployed as of April, a government paycheck seems stable by comparison. How can families prep their finances for ongoing economic instability? Here are five of the money principles I advocate in my work counseling soldiers, veterans and their families:

1. Instead of expecting 7% to 10% annual investment returns—which may have occurred historically but will likely be less for the foreseeable future—try reducing your living costs by 7% to 10% and investing the difference. The compounding effect on your family’s wealth will be powerful. You’ll “need” (a word folks use when they actually mean “want”) less to cover your living costs when you’re older, because your expenses will have already come down.

2. If you have debt, pay it off now. If it’s credit card debt, you’re nearly certain to do better paying down that debt than by investing in the stock market. As Warren Buffett recently noted in his surreal online shareholder meeting, we don’t know where the economy or the market is headed in the short term, but the math is irrefutable: If you owe 18% on your credit cards, zeroing out that debt is virtually guaranteed to be the best return you can get.

3. A paid-off house is better than one with low interest rate payments spread out over time. (In fact, I think it often makes sense for Americans to rent not buy, but that’s a different topic). In the recent bull market, when we enjoyed historically low interest rates, I saw many people take out mortgages so they could invest more in the stock market, because they believed stock returns would likely be higher. Often, that leverage works—but sometimes it doesn’t. And when it doesn’t, the results can be scary.

In addition, a paid-off home gives you options that money in the stock market doesn’t. If times are prosperous, that paid-off home means you’re free to pursue the career you want without worrying about a steady paycheck. What if times are hard and you’re laid off? You can write the next sentence yourself.

4. Build an emergency fund equal to three-to-six months of living expenses. For unemployed Americans, right now is an emergency. Don’t think it can happen to you? My personal black swan event: My physician wife’s pay was slashed recently, while she continues to provide care for COVID-19 patients. Anything can happen, so be prepared.

5. If you’re fortunate enough to have the ability to invest in a retirement plan today, don’t get cute with your contributions. Slow and steady wins the race. If the world’s best investors struggle to time the market, we mere mortals are best served by contributing monthly to an S&P 500 index fund. Sitting on the sidelines waiting for the market to drop further will likely mean missing out on the long-term gains that come from investing in America’s phenomenal capitalist engine.

During this year’s Berkshire shareholder meeting, Buffett talked in an unusually somber tone, but his message was clear: Never bet against America over the long term. From my foxhole, I constantly find myself in awe of the people from all over our country with whom I serve. My firm belief: America’s sons and daughters—whether they wear the uniform or they contribute to our country in other ways—will forge a path forward for our nation and our economy, together leveraging our collective talents to great success.

John Goodell is a government attorney who has spent much of his career advocating for military and veterans on tax, estate planning and retirement issues. His biggest passion is spending time with his wife and kids. Follow John at and on Twitter @HighGroundPlan. His previous articles include At EaseIncome Isn’t Wealth and Average Is Great. The opinions expressed here aren’t necessarily those of the U.S. government.

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