"Mind What Matters" isn't just a phrase—it's a philosophy that recognizes your unique journey. What matters to you is personal and evolving—your aspirations shift and transform as life unfolds. There's no universal definition of success, your priorities are what count.

When it comes to achieving what's important to you, the most powerful approach is focusing your energy on what you can control while filtering out the noise that can distract and derail you. This focused mindset is the foundation for making meaningful progress toward what truly matters in your financial life.

Factors That Can Be Controlled

1. Your Savings Rate

One important factor in financial planning is your savings rate. While market returns are unpredictable, how much you save is a factor you control. 

Prioritizing savings by setting aside a portion of your income each month provides a foundation for wealth accumulation. While the required savings rate will vary based on your goals and timeline, a good starting point is to aim to save at least 15-20% of your income, but even smaller, consistent contributions can make a significant difference over time. 

Note: This may not be as cut and dry for business owners as many times your "savings rate" is funds being reinvested back into your business to help it grow. That too is a meaningful factor that will help you reach your goals over time. 

2. Asset Allocation and Diversification

Although you cannot control market performance, you can control how your portfolio is structured. Asset allocation—how you divide your investments among stocks, bonds, and other assets—plays the most important role in determining risk and return. 

Diversification further helps reduce risk by spreading investments across different sectors, industries, and asset classes. By carefully choosing an asset allocation that aligns with your risk tolerance, investment goals, and timeline, you take charge of your financial future. 

3. Investment Costs and Fees

High expense ratios, trading costs, and other miscellaneous fees can erode investment gains over time. Opting for low-cost index funds and exchange-traded funds (ETFs) can help minimize costs while maintaining broad market exposure. Additionally, being mindful of transaction fees and tax implications ensures that more of your money stays invested and continues to grow. 

4. Tax Efficiency

Taxes can significantly impact your investment returns, but with proper planning, you can manage your tax burden. Contributing to tax-advantaged accounts like Pre-Tax and Roth 401(k)s, IRAs, and Health Savings Accounts (HSAs) can help defer or reduce taxes. 

Additionally, strategies like tax-loss harvesting, tax-efficient asset placement, and funds/ETFs with low distribution rates ensure that you maximize after-tax returns. While tax laws will continue to change over time, smart tax planning is always within your control. 

5. Your Investment Behavior

Market ups and downs are inevitable, but your reaction to them is within your control. Emotional decision-making, such as panic selling during market downturns or chasing hot stocks, often leads to poor investment outcomes. 

A disciplined, long-term approach—sticking to your investment plan, rebalancing periodically, and avoiding impulsive decisions—leads to better financial success. Practicing patience and avoiding emotional trading can help you stay on course toward your goals. 

6. Risk Management and Insurance

While we cannot predict unexpected events, we can prepare for them. Having the right insurance policies—such as health, disability, life, and liability insurance—protects against financial hardships caused by illness, accidents, or disasters. Ensuring adequate emergency savings (at least six months' worth of expenses) also provides a financial cushion in times of uncertainty.

7. Your Financial Plan Specific to Your Goals

Having a clear financial plan provides direction and purpose for your investing journey. Instead of worrying about short-term market fluctuations, focus on setting and achieving realistic financial goals—whether that's saving for retirement, buying a home, funding a child's/grandchild's education, building a legacy, or charitable planning. Regularly reviewing and adjusting your financial plan helps keep you on track despite economic uncertainties.

8. What Happens When You Are Gone

Having your Estate Plan formalized is an important factor that you can control that will have a significant impact on ensuring your goals are carried out how you intend. Make sure your beneficiary designations and your Will/Trust are aligned. Additionally, having your Powers of Attorney updated will help allow the correct people to make decisions for you when needed.

Review your Estate Plan every 3-5 years. Your life will likely evolve, your documents should too. Open communication can also help ensure your goals and intentions are followed as best as possible. 

Factors Out of Your Control

We focused a lot on what can be controlled, but it is worth noting that not everything falls into that category. It is equally important to block out the noise of areas that are out of your control. 

When it comes to investing and financial planning, many people worry about things beyond their control—market fluctuations, economic downturns, weather/natural disasters, geopolitical events, the list can go on forever. The media amplifies this by flashing negative headlines in big bold letters or market downturns in bright red. These outlets benefit by grabbing your attention and more "clicks" largely through invoking fear. They are not incentivized to help you stick to your long-term financial plan. 

However, successful investors and financial planners understand that true financial security comes from focusing on what they can control. Direct your energy toward manageable factors to build a more resilient and effective financial strategy. 

By focusing on what you can control in investing and financial planning, you reduce anxiety and increase your chances of success. Saving diligently, maintaining a disciplined investment approach, managing costs, and making informed financial decisions put you in a stronger position to build wealth and achieve financial security.

Ready to focus on what you can control in your financial life?  

Instead of worrying about the unpredictable, take charge of the factors within your reach. Lutz's experienced advisors can help you create a personalized plan that aligns with your unique goals. Contact us to learn more about our financial planning services and start minding what truly matters.