Financial Planning and Garden Sheds

Financial planning is like building a garden shed.  Building it is simple enough that you and a helper can do it, but complicated enough that you will need to be organized.  There are three layers to the plan just as there are three layers to a first financial plan.  The layers are strategy, tactics and logistics.  In that order.

Is my vision  like this?


Or am I more ambitious?

gardenshed 2

The Strategy Layer involves answers to “W” questions” and will help resolve questions like that.

  • What is it for?
  • Why do I need it?
  • What must go into it?
  • What would be nice to put into it?
  • What size should it be?
  • What resources can I use to buy it?
  • What resources do I need to build it?  Tools and other materials.
  • Where should I locate it?
  • When does it need to be finished?
  • What limitations are there?  Bylaws for example.
  • Who will help me build it?  Do it yourself or contractor
  • What saving on materials and tools can I expect if I use a contractor?

I would need to know the answers to these questions before I decide to use a contractor or build it myself.  I especially need to know the answer to most of them if I choose the contractor route.

The contractor is responsible for the how and should have limited input to the “W” questions.  Ideally only to isolate conflicts and provide a few more that I forgot.  The contractor is tactical.

The Tactical Layer involves “How”

Tactical helpers know more about the details.  They have done this before and have learned from their mistakes.  They can provide valuable insight into your strategic choices.  Things like, “That is good place for the shed in the summer, but in the winter you will have no place to put the snow.”

They will be familiar with processes and materials that may provide a better answer than the fuzzy one that the strategist holds.  They can buy needed things cheaper.

They will ask clarifying “How” questions.  Like:

  • How would you like me to build the foundation?  Choices involve a concrete slab or patio slabs properly organized.  Here are the pluses and minuses for each.  Which would you prefer?  I recommend slabs because with your terrain, they will work and save you money.
  • How should I organize my time?  Can I start at 7:00 AM or will the neighbors complain?  Should I have a crew of four at higher cost but done sooner?  Your call?  Do You want to survey the neighbors before you decide?
  • How should I design my job?  Would you like ongoing maintenance or done right once and forever?  I recommend done once. A perfect job requires more skilled and thus more expensive tradesmen.  As another choice, there is a somewhat more expensive shed kit that is much easier to assemble.  We could do that with cheaper labor and it would save you a little money.

The important observations are that the contractor has specialized skills and knowledge that far exceed those of the strategic planner.  As a result, the contractor can provide optional methods that will achieve the goal.

The contractor should check back for a decision in this form.  Here are the choices and their differences.  Here is what I recommend because.  What do you prefer?

The Logistics Layer is the one many people overlook.  It is the actual doing of the job.  It is all fine to get strategy and tactics worked out but if the logistics is clumsy, the job will end badly.

In military action, the political layer determines strategy.  Churchill could say,  “Take back continental Europe” but it isn’t going to happen until Eisenhower and others determine how.  And even if the what and the how is perfect, nothing will happen until there is air cover, a force on the ground who have the right food at the right place at the right time, the proper number of boots and bullets, gas for the tanks and a thousand other little things that collectively are a big thing.  “Dilettantes discuss strategy, amateurs discuss tactics, professionals discuss logistics.”

Over time, building your financial plan is harder than building the garden shed.  Financial plans evolve, while the garden shed can be in the done right, done forever model.  Financial plans need one more layer of activity.

The Review and Revise Layer

This process involves reviewing the strategic and tactical background with a view of determining what if anything should change given the new information that we possess a year or two later.  If there are no changes needed, that is fine, but there are usually things that go onto a “watch list.”  They are not adverse yet, but the concern is there.  A “watch list” provides the opportunity to take action before the next scheduled review date.

In the world we see today, every watch list contains questions about bonds and precious metals.    Some include personal real estate and resource based equity.  A properly designed watch list should include the reason the item is on the list and what would be the trigger to change the old decision.

The good side is that the review is active and clients can be involved, and can learn things about their situation that will lead to better decisions or more appropriate vigilance in future.

We, in North America, live in interesting times.  We can more easily navigate the future with a mix of vigilance, discipline, options, and decisiveness.  Having a plan you understand, a helper to add detail, and evolving current decisions will serve you well.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.  |  Twitter @DonShaughnessy  |  Follow by email at moneyFYI

One Comment on “Financial Planning and Garden Sheds

  1. Pingback: Can You Distinguish Between Mozart and Meat Loaf? | moneyFYI

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