Using Miracles Productively

I have not played bridge seriously for a long time.  I still remember lessons that apply to financial planning.

In bridge, success is a function of time and timing.  Give up a little here to learn about the distribution of the cards or to make the future play more predictable.

In suit contracts, when you plan the play you count losers and establish conditions under which they can be made to disappear.  In no trump contracts, you count your winners and establish the conditions under which they could lose and then seek a defense to such occurrences.

Financial plans are usually approached in the no trump style.  Resource rich and requiring defense from adverse circumstance. 

Sometimes a particular set of circumstances must be present for success.  In bridge, maybe opponent could have more than three cards including the jack in diamonds.  You notice the adversity and plan to avoid it.   As the hand progresses you may learn more that creates a new problem or provides an easier way to succeed.

You cannot know everything in the beginning, but you can know the range of possibilities and how you may fit within them.

It is wiser to play within the normal historic results and adapt as you go.   It does not always work out, but it makes more sense to play for situations with the greatest probability of success.

Sometimes a contract, usually a suit contract, is highly improbable and more adventurous methods must be employed.  Perhaps there is just one layout of the cards that would allow you to make the contract.  You should play as if that situation exists.

The difference between bridge and financial planning is that the penalty to fail in bridge is not material.  There will be another hand to play in ten minutes.  Financial planning is not so forgiving.

In financial planning your best moves are several:

  1. Understand your strengths and weaknesses.  Your money, skills, career, and temperament.
  2. Understand your obligations.  Your health, your family, your career, retirement and your estate.
  3. Understand the situation you are trying to use to gain advantage.  The economy, stock market, taxation and possible products.
  4. Use your strengths in ways that are proven and historically probable.
  5. Be alert for changes.
  6. Use advisors who have specific knowledge that it is not worth you time and trouble to learn.  Taxation, law, insurance, and likely investments.
  7. Have someone who is your mentor.  You will make the same mistakes they did if you try to do-it-yourself.
  8. Have someone who is your conscience.  It is like the computer warning that says, “Are you certain that you want to permanently delete this file?”  Avoid predictable and massive mistakes.

If you avoid the usual methods, you may succeed.  Possibly do better.  But, you will not do so with the same time and effort on your part and you will be exposed to a much wider range of outcomes.

Sometimes people feel the need to do things that their advisors would discourage.  Other times they have allowed the situation to deteriorate to the point that they need a miracle.

Financial planning is a process driven method to achieve a goal.  Miracles are an event driven method to achieve a goal.  Processes are predictable while events are more random.

I believe in miracles, but I don’t like having to rely on them.


Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.

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