Resolution: Become financially independent

The fireworks have finished, the hangovers have hopefully faded, and the new year is officially upon us.

Welcome to 2018, Fool!

Now, I’m a born optimist — and I have history on my side, by the way — and I expect 2018 to be better than 2017. Humanity is on an upward-sloping trajectory, notwithstanding the occasional slump, and the future will be better than the past.

And certainly, as far as the stock market goes, predicting gains in 2018 is a smart strategy. Why? Well, because as Motley Fool co-founder David Gardner likes to say, the market goes up two years out of every three, on average, so calling for an ‘up’ year is simply the smart bet!

Of course, that also means one year in three is a downer — and those are averages… there’s nothing to say we can’t have a few good or bad years in a row.

Which is why, as capital-F Foolish investors, we take the long view.

Markets rise — strongly, thanks to the ‘miracle’ of compounding — over time. So just buying a low-cost index fund is a smart wealth-building strategy.

And if you can find quality businesses at reasonable prices, you can very probably do even better.

But to ease into the new year, I’ll save the investing theory for another day.

Instead, at the beginning of this new year, I want to help you get your financial life off to a fresh start.

Yes, we should smoke less, eat less and exercise more. I’ve never been a smoker, but I’m guilty as charged on the last two — so I won’t try to take the moral high ground on that stuff (though if you’re interested, Peter FitzSimons seems to have cracked the code on the health stuff. A quick Google and you’ll be on the right path).

No, instead, I’m going to turn my attention to your finances. I want to help you get financially fit and fiscally healthy.

The good people in marketing tell me that you should only give people three things to remember, three steps to follow, etc, etc.

But you’re smart, thoughtful (and charming, good looking, funny…), so I’m going to give you a longer list.

Basically, if you can follow these rules, in some sort of order — moving to the next as you master each one — I have no doubt you’ll change your financial life for the better.

I run Motley Fool Share Advisor , one of the investment services here at The Motley Fool. And I created these steps, with my colleagues, for our members. I’m sure they won’t mind me sharing them, here.


Foolish New Year’s Resolutions

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1) I will live below my means — spending less than I earn.

2) I will save money into a rainy-day fund so I’m ready for what life might bring.

3) I will pay off my credit card debt, and only spend what I can pay off within the interest free period each month.

4) I will regularly add to my investment account.

5) I will invest money I don’t need for at least 3-5 years to build my nest egg.

6) I will learn more about investing, taking control of my financial future.

7) I will invest in quality businesses, buying a slice of the company, not just a code on a screen.

8) I will buy shares in a company with the intention of holding them for the long term.

9) I will sell when my investment thesis fails, the company is overvalued or I have a better idea.

10) I will avoid anchoring my decisions to the price I paid for my shares.

11) I will remember that the market can be moody and over-react, both on the upside and the downside.

12) I will expect volatility, and I won’t let it spook me into selling. Indeed, volatility can offer me great opportunities!

13) I will let the market offer me prices (be my servant), not dictate my mood or actions (be my master).


That’s it. 13 easy-to-understand steps that might require a little effort, but will deliver long-term rewards in spades.

No, there aren’t any ‘hot tips’ or ‘get rich quick’ schemes in that list. No Bitcoins, leveraged derivatives, or fancy trading software.

Just common sense, learned from experts, and thoughtfully applied. The rest, I’d humbly suggest, is noise.

I wish you a safe, happy and prosperous 2018

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Scott Phillips owns shares of Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia has recommended Amazon. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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