Lee Felstenstein is a computer engineer. Based on his exploits, a very good one.
You have to be a bit of an old guy to remember the Osborne I. For those who do not, it was the first mass-produced portable computer. It had all you might want. A z80 processor, CP/M 2 operating system, an 80×25 monochrome screen, two floppy disk drives and 128k of RAM. You could add a 300 baud modem too. It came with a bundle of useful software and retailed for about US$ 1,800, around $10,000 of today’s money. At 23 pounds it was more luggable than portable.
It was wonderful and I really wanted one.
Lee Felstenstein has made an observation that applies to more than early computer technology. It applies to the need for planning.
“I have seen the future, and it needs work.”
If the future required no work, there would be no reason to plan. Things would just work out. We know they do not.
Planning provides no guarantee of a prosperous and easy future, but it could and probably should create a bias towards success. Some planning things, if absent, doom the future. If you save nothing you will have nothing in the future. If you wait too long you will lose the power of compound interest. If you leave yourself exposed too easily observed risks, one or more may happen.
Planning is not more than organized common sense. There are refinements that planning can help you to understand.
- Over-saving is a weak idea
- Things that limit the growth rate of savings must be examined and a useful compromise created. Paying no tax is a dumb tax plan. Do-It-Yourself and paying no fees to professionals usually costs more than the fees would cost.
- Time matters more than capital.
- Some risks are manageable even if not avoidable
- If you plan, you have something to compare actual performance with and that provides insight into what changes are needed.
- Plans require discipline. No plan, no discipline, is common.
Planning might help you get what you want. No planning usually guarantees that you will get what you don’t want.
It is an adult decision.
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.