I recently undertook the time-honored tradition of the family vacation to Walt Disney World. Despite the stories you often hear about long lines and cranky kids, we had a fantastic time. After being home for a couple of days and reliving some of the highlights of our trip, I realized some of the things that make for a successful Disney vacation (or any vacation for that matter) are the same things that help create success in the investing world.
1) Have a Game Plan: Well before the plane touched down in Orlando, my wife and I had spent time (along with some input from the kids) talking about which parks we wanted to visit, what types of rides we wanted to do, and which ones were our priority. When we arrived to the Magic Kingdom on the first morning, we didn’t wander aimlessly – we knew where we were heading.
In the investing world, having a game plan – a financial plan – can help guide investment decisions. Before you jump feet first into the market, it helps to understand your risk tolerance as well as identify what you are saving for (retirement, house, kids’ college, etc.) and how much you should be investing versus saving to achieve those goals. P&A offers complimentary financial planning for all our clients – if you have not gone through this process, give us a call and we would be happy to get the ball rolling.
2) Realize Your Game Plan Won’t Always Go As Planned: On Day 1 at Disney, we realized we had greatly underestimated our kids’ love for big roller coasters and thrill rides. The rides where we had advance reservations (called a “FastPass” in Disney lingo) were the more mundane, little kids rides – think “it’s a small world” and the Teacups. After the kids fell asleep that night, my wife and I pulled out our iPhones and started updating our ride reservations for the next two days. This resulted in shorter lines and happier kids for the rest of the trip.
The investing world is no different – no matter how much you think you’ve nailed down your financial plan, things change. Life throws curve balls at all of us – some good, some not so good. A good financial plan is one that is updated to reflect new realities and new goals as they arise.
3) Don’t Put All Your Eggs in One Basket: With kids ages 2-7, we faced the challenge of selecting different rides and activities to do that would keep everyone happy. We visited a couple different theme parks and made sure we explored different areas of each park. In short, we diversified. We knew everything would not be a hit, but it gave us a better chance for making the experience more enjoyable for everyone.
It is important to have a well-diversified investment portfolio. Having a good mix of large cap, mid cap, small cap, and international stocks, as well as fixed income, can help you and your portfolio stay on track to achieve the goals in your financial plan.
In case you are curious, here are a few of my highlights and recommendations for a fun Disney World trip:
Toy Story World at Hollywood Studios: This is a newer part of the park that immerses you in the toys’ world. This is also home to a couple of the best rides across all of Disney World – the Slinky Dog Dash roller coaster and the Toy Story Mania! 3-D ride.
Magic Kingdom: For younger kids, just about everything in this park is magical. We snagged reservations for breakfast with the princesses at Cinderella’s castle, which was a highlight for everyone. In a rare win for Dad, I managed to convince my seven- and five-year-old to go on Splash Mountain – still a classic ride.
On-Site Lodging: A lifesaver for our trip was staying on-site at Disney. We stayed at Bay Lake Tower, which is walking distance to the Magic Kingdom. This meant our two-year-old could sneak back for a nap during the middle of the day (a big thank you to my mother-in-law for helping out!). Bay Lake Tower is one of Disney’s timeshare properties, but can be booked like a hotel room. It has a living room and kitchen separate from the bedrooms, which gave us plenty of room to spread out after an exhausting day at the theme parks.
Whether you are heading to the Happiest Place on Earth or saving and investing for retirement, having a game plan and adjusting it over time can play a big role in increasing your success and lowering your stress level throughout the experience.