Former heavyweight boxing champ Mike Tyson once said, “Everybody has a plan until they get punched in the mouth.” I love this quote because it applies to virtually any endeavor. Life often throws us a jab here or a hook there. Whether a health issue, the death of a loved one, or the loss of a job, this “punch” can easily derail our original plan.
I came across Tyson’s quote again recently and it caused me to think about the implications for financial planning, because, well…that’s the business we’re in. Our job is to help people make smart financial decisions so they have a better chance of reaching their goals and ultimately living the life they imagine.
So much of life involves important money and financial decisions. And “financial” goals are really “life” goals when you get down to it. Wanting to retire early is most likely driven by a desire to have more time to pursue other interests (travel and leisure, an encore career, grandkid time, etc.). The quicker you get to this financial freedom point, the more time you’ll have for these other pursuits. And if getting to a point of financial freedom is your goal, then you need to have a plan.
Now a financial plan by itself is practically worthless without a process for ongoing planning. Ours looks like this: First, we’ll take a financial inventory to determine where you are, then we’ll have a conversation about where you want to go (your long-term financial and life goals), and finally formulate a plan to help you get there (the short-term and intermediate goals and action steps). As John C. Maxwell says, “the purpose of goals is to focus your attention and give you direction.”
P&A’s approach to understanding and clarifying your goals is simple and straightforward. In a matter of minutes, we can help you determine your standard of living without getting into the weeds of tracking down expenses or trying to figure out how much you’ll spend on utilities 20 years from now.
The next step in our process is to make some educated guesses about what the future might look like. With each passing day, we’ll have a bit more information about the accuracy of these guesses. Quoting Maxwell again (can you guess who I’m reading now?), “You may know where you are going, but only as you move toward your destination can you see and experience things in a way not possible before you started.”
So as life happens, course corrections will be required and our guesses will be revised. This is the ongoing part of the financial planning process, and it’s vital to a successful outcome. Financial plans are like diets and workout programs….you only see results if you continue to work on them.
The point here is to stress not just doing a financial plan, but committing to the ongoing process of financial planning. This is the only way you will end up at the destination you desire. If you don’t yet have a financial plan, or it has been some time since you’ve updated your plan, let’s have a conversation. P&A makes this process easy.
We should all want to maximize our given time and efforts, and there’s no better way to do this than by creating a plan. What’s your plan?