Are you one of those people who says, “I make a new financial plan every few years. But the wheels fall off every single time. Honestly…what’s the point. Why bother?”
I suspect you know why a financial plan matters, but let me offer this…
Twenty years ago, a man named Bob Castiglione told me, “Money is not math, and math is not money.”
At the time I just scratched my head (till all my hair fell out). Eventually, however, I figured out what he meant.
The advent of personal computers in the mid-80’s gave those of us in the financial planning field the ability to crunch numbers to our hearts’ content.
Armed with the ability to calculate an infinite number of financial possibilities, my financial planner colleagues began churning out elaborate projections of potential financial futures.
I can’t prove this, but my theory is that this is when the public started thinking we financial “experts” can (somehow) predict the future.
News flash. We can’t.
I suppose we could tell you what lies ahead IF you were able to provide us with a few pertinent details: like what interest rates, tax rates, market returns, global conditions, and inflation will be in the future.
But because you can’t know those things any more than we can, our numerical projections and economic predictions will never be 100% accurate.
Fact is, our financial futures are tied to a myriad of unknowable future circumstances.
And there’s another significant factor to consider. Call it basic human nature.
Think about it. Every year, countless people make elaborate plans to save, save, save…only to discover that once they’ve accumulated a stash of cash, human nature kicks in.
Economists call this “the propensity to consume.” (Your grandfather used to call it money “burning a hole in your pocket.”)
No doubt about it…unanticipated circumstances can wreak havoc on even the best financial plans.
But it’s human nature, in all its sneaky forms, that is most responsible for ruined or abandoned financial plans.
So…if you think your financial plan isn’t an accurate snapshot of what’s ahead, you are correct.
But it can tell you very clearly what you should be doing today.
The takeaway? A good financial plan is less about crunching numbers and more about corralling human nature.
Human nature is the thing, more times than not, that will mess up your math.
Let me close with one last thought about financial planning.
If you’re wondering, “How, in retirement, am I going to turn all the money I’ve saved in my 401(k) or IRA into regular income I can use to pay my living expenses?” I’ve got a free tool you’re going to love.
It’s called the RISA (i.e., Retirement Income Strategy Assessment). In less than 10 minutes, it can show you what kind of retirement income plan best aligns with your personality, goals, and lifestyle. There’s no obligation, and you can access it by emailing me (bmoore@argentadvisors.com).
Then if you want to discuss your results further, give me a call!
Argent Advisors, Inc. is an SEC-registered investment adviser. A copy of our current written disclosure statement discussing our advisory services and fees is available upon request. Please See Important Disclosure Information here.
