If you own a business or are a professional like a doctor, lawyer or engineer, it is likely that you will work more than 100,000 hours in your career.. If you are an employee, it is likely to be more than 70,000.
Taking together the time to learn your skills, the risk, the doing of the work, and the sacrifice of other things that would have been nice, those hours represent your investment in the economic value of “You.” We can agree that the value is quite large. Enough to pay for your living, pay a lot of taxes, fund your retirement and leave something for the children. Millions of dollars.
Now write 100,000 on a piece of paper.
Stroke off zeroes until you come to the number of hours that you will spend, in your lifetime, planning what to do with the very large number with the dollar sign in front of it. Be honest.
I presented this idea in a seminar once and after I stroked off a couple of zeroes someone in the back said, “Get real. Stroke off the one.” It is not far from reality for most people.
Most give the financial planning task to people who ask too few questions to find out what you want, do not ask enough about priorities or policies, and do not supply enough options. Typically, they are quite interested in your current and near future resources. That interest does not always coincide with your interests.
Financial plans are almost always weak if you let a “planner” prepare them for you.
When looking at financial planning recognize that you are the planner. Everyone else is a helper. You acquire helpers because you will not become good at tactical methods you have never used before and may never use again. Tactics change frequently and they are complex. You can buy the answers easier than learn what you need.
You do it all the time with other areas of your life. Have you ever given any thought to doing a root canal on yourself? Even a filling?
Most people don’t do financial planning because they don’t know how. They procrastinate first and then they delegate. It is likely that abdicate is a better description than delegate.
You are the only potential loser in this arrangement so you might want to learn a little more about financial planning.
Your part is actually straightforward and properly directed you probably already know the important parts. Your part is the vision, the priorities, and standards. It is the “what am I trying to do?” question. It is the time to completion and the participants. It is the resources available to address the things you want. You must learn to address the “W” questions of what, who, where, and when. If you can address why, it will provide emotional value and thus the motivation to continue over long periods. The rest of your life is the normal time frame.
You cannot start with methods and hope to succeed. Strategy first.
If you have addressed strategy, you immunize yourself against weak methods from the helpers. Tactics are the answer to the “How?” question that falls out of the “W” questions. Every tactic becomes an answer to the question, “Using what I have, to get what I want, when I want it, will this method help?” Ideally there is more than one choice. Maybe there are temporizing solutions until more resources come available.
A tiny bit of learning will give you the background you need to make quality decisions about your financial future. Perspective is wider and events have context. You will have balance, a better understanding of risk, and more predictable outcomes. Peace of mind.
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Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario. Contact: don@moneyfyi.com
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