Thinking Like An Owner

By Scott Spiker


The Online Magazine from First Command Financial Services

Putting the Train Back on Track

By Scott Spiker, Chief Executive Officer

John F. Kennedy famously said that “victory has a thousand fathers, but defeat is an orphan.” That historic quote has certainly proven true in today’s troubled economy.  We’ve seen blame placed on many doorsteps.

Lots of fingers have been pointed at the bankers and mortgage bankers; however, one might argue they were just following market formulas for reselling bundles of mortgages to Wall Street. How about Fannie Mae and Freddie Mac?  Maybe some blame here, perhaps, but we think they had good intentions … to give Americans the opportunity to own their own homes. Should we blame the investment bankers? After all, they packaged these up into securities.  If they did that without much capital or oversight, does that make them wrong?  Probably some excesses here, but they certainly will be dealing with the consequences for years.

All of these parties are likely suspects. But there is at least one more suspect, perhaps the most important of all: the American consumer. As a nation we need to acknowledge that it’s not merely the major corporations that have taken on too much debt and failed to adequately invest for the future in recent years. We live in a consumption-fueled economy, addicted to the opiate of consumer spending. Credit card levels and other vehicles of personal debt are at record highs. The average American gave up on meaningful savings practices years ago. Many personal balance sheets are in tatters.

The government bailout effort is certainly an important interim step, but it’s no permanent cure for our nation’s financial ills. Our problems can only be solved by a permanent change in consumer behavior. We must stop spending – and start cutting personal debt and increasing the savings rate. This is not a quick or easy fix. Far too many individuals have lapsed into sloppy financial habits. Now it’s time to take steps to put the train back on the track.

As a First Command client, you may already be sleeping soundly, confident in your daily practice of the sound habits that pave the way to financial success. We have established lasting and satisfying relationships with hundreds of thousands of client families. Some of you have been with us for decades and have already declared your financial independence. I applaud your achievement and discipline. But if you’re not yet where you want to be – or if the current economic climate has you rattled– please know we are ready to help.

If you are a long-time client who has grown concerned about the future of your long-term investments, don’t worry alone. Set up a meeting with your Financial Advisor. Together you can re-evaluate your tolerance for risk. Your Financial Advisor can help you explore opportunities for diversification or allocation of holdings in different asset classes, making the ups and downs of a volatile market a little easier to stomach.

If you are a newcomer to First Command, we can help you, too. We are committed to helping deserving American families get started and encouraging them throughout their financial journeys. There is great value in the relationship you have with your Financial Advisor and our company. Our research consistently shows that clients who have a financial plan – and a relationship with a trusted advisor – are more likely to stay the course during times of market volatility than those without a plan.

If you have a First Command Financial Plan, the current economy offers an ideal opportunity to meet with your Advisor and explore possible adjustments. And if you don’t have a plan, I can’t think of a better time to put one in place. Give us a call.