Choose the Right Vehicle for Your Environment
Who would design a car like this?
First there’s the sheer size. There’s just no way, at 73 feet long, it’s ever going to fit into a normal person’s garage. And at nearly 20 feet tall, it may not even go under many bridges on today’s highways.
And how ridiculous is this…it is nearly as wide as it is long (69 feet at its widest point)! Can you imagine driving down the Interstate and seeing a vehicle 69 feet wide? You’d have to have a sign hanging on the back that said “Wiiiiiiiiide Load.”
Yet with all that size, it can only carry twelve passengers. Granted, many cars cannot carry twelve passengers. But if you need to carry that many people, just get a van. Some of those are big enough to carry 15 people.
And the cost? Well, that’s the worst part. You could buy 100 traditional luxury automobiles for the price of just one of these monstrosities. There is absolutely no good reason to pay all that money when many other less expensive and more practical cars are available.
That is, unless you want to travel 30,000 feet above the highway at speeds exceeding 500 miles per hour.
If you did, the Cessna Citation Longitude might be just the craft for you. With a 4000 mile range and a 500 mile per hour cruising speed, this baby could get you from North Louisiana to New York City in less than 3 hours.
As a car, a Cessna Citation Longitude stinks. And don’t even get me started on how useless this thing would be in the woods as a hunting vehicle.
But as a mid-sized private business jet, it’s the gold standard. You’ll have to judge for yourself if you can swing the $27 million price tag. If you have to ask about payments, you can’t afford it.
In the travel world, choosing the right vehicle depends on your environment.
If you’re going deep into the woods to hunt, you’re looking for something small, agile, waterproof and four-wheel drive is pretty important. Yet you wouldn’t think of using a hunting buggy for a daily commute on the highway. Wrong vehicle for that environment.
So where am I going with all this?
I see this same issue come up over and over again in the financial world. Someone comes to see me, and they are using the wrong financial vehicle for the economic environment they are in.
I remember one guy who was using an equity mutual fund to save up for his next car. When the market tanked just before he was ready to buy his car, his plans suddenly changed. He went from buying the new car he wanted to buying the used car he could afford, all because it didn’t occur to him that the market could crash at the wrong time.
He used an investment vehicle for a savings purpose. It was the wrong vehicle for the environment he was in.
Or the woman who wanted to reduce the risk in her 401K account now that she was retired. She didn’t need income from the account yet, but she wanted it to slowly grow while she got used to the first few years of her retirement. She needed low risk and high flexibility.
What she got from a slick sales guy was an annuity with some of the highest fees I’d ever seen, only to be outdone by the length of time “surrender penalties” would apply if she dared to actually spend any of the money in that account.
Again, wrong vehicle for the environment she was in.
Is insurance good? Are savings accounts better? Are investments even better. Is rental real estate the best?
You answer should always be, “It depends…”
Depends on what?
It depends on the financial environment in which you find yourself.
Spend as much time understanding your financial situation (your environment) as you do considering various financial solutions (your vehicle).
That way, you’ll not only enjoy the journey. You’ll get there in one piece.
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