A Plan Is Not The End, It’s The Beginning

I met my wife Carrie when we were 18 years old and starting college.

If you had asked that kid to predict that we would get married 5 years later, that we would have two boys, or that we would still be together 26 years (and counting!) later, he would have missed all three. He was very smart, but most things in life cannot be predicted.

That’s something many financial planners don’t want to admit: we have no idea what the future holds, and you don’t either.

Knowing the Unknowable

When creating a financial roadmap together, we make many assumptions. When will you retire? What inflation and investment returns will we see? How long might you live?

Why do we make the effort knowing that goals change, marriages may begin or end, and forces beyond our control will change those assumptions?

A cynic might say that it creates a false sense of accuracy and control. Or that there is no point in planning for the future because we don’t know every detail about what may happen.

But planning for the future isn’t about knowing the future.

Having a Flight Plan

Every pilot files a flight plan before they take off. In it are assumptions about the weather, the planned route and speed, and fuel needed for the flight.

A flight plan is a necessary starting point. It helps ensure you have thought through where you want to go and what you might need to get there.

Once in the air, an experienced pilot knows how to adjust when the unexpected happens. She doesn’t expect every assumption to come true, but that doesn’t mean the plan wasn’t valuable.

The value comes from having a foundation from which to make adjustments. You make your best guess, adjust, and move forward.

Getting Real Value from Your Financial Plan

This is why I’m not a fan of the printed, leather-bound 200+ page financial plans that some advisors provide. Most are inaccurate as soon as they come off the printer. Thus, they often become nothing more than an expensive book collecting dust on a shelf.

Instead, a valuable financial plan should:

• Narrow down what’s important to you right now. What vision of the future excites you? What concrete steps should you take to start working towards that vision today? Are the steps clear and manageable?
• Make evaluating possible adjustments easy when needed. Your plan is an evolving roadmap. Does it help you understand what your options are when you have decisions to make? Can you make big changes to the plan if life throws you a curve ball?
• Leave open to you as many options as possible. Part of your plan’s value is showing you new ways to deal with life’s changes. It should help prepare you for negative events, like the pilot prepares for bad weather. It should also give you new ideas on how to succeed and reach your vision!

_____

I never could have predicted in 1992 that I would soon meet the woman who would change my life forever. We can’t predict every life change. But just because we can’t know the future doesn’t mean there’s not value in planning for it.