Golf is a relatively simple game. It is difficult to be proficient, but not so hard to understand the ideas.
President Woodrow Wilson summarized the proficiency aspect.
“Golf is an ineffectual attempt to put an elusive ball into an obscure hole with implements ill-adapted to the purpose.”
There are others who have suggested that the goal is to put a small ball into an even smaller hole. There are days when that seems true too. Even from two feet away the task is sometimes formidable.
Which, of course, brings us to financial planning.
Financial planning is harder than golf for several reasons:
- The goal in golf is known and does not change. Financial Planning is less structured.
- The rules of play in golf are known and, subject to small local variations, don’t change. Every person has their own unique ideas about what governs financial success.
- The measurement of success in golf is simple and easily comparable to a standard. There is no par in financial planning. Standards are variable. Measurement is a little odd.
- The ball is standardized. In financial planning, money, the object of play, changes, but not predictably. Knowing what inflation will be five years from now is impossible. Could even be deflation.
- The “ill-adapted” instruments of golf are designed for a particular purpose. Ill-adapted is not quite correct. Adaptation and resulting outcome is the work of the golfer. Similarly sound financial tools can be misapplied and weak results achieved.
- The field of play includes hazards. Just like I can lose a golf ball, I can lose money because I misplayed something, or misunderstood the terrain, or was tricked by an optical illusion. Most likely I lost concentration.
The same people who play golf seriously have planning needs and, as we see, they are difficult to assess and manage. Nonetheless, at the club, a financial planning discussion will last 60 seconds and end with someone describing how they bought some tax sheltered resource fund or other. The rough equivalent of hitting a golf ball into the pond on the 17th hole.
A lengthy and learned discussion will follow on the advantage of a gap wedge.
The point is clear. People will think about and discuss the things they are interested in and understand. Like golf. The primary duty of a financial planner is to connect to the client so they can be as well informed and interested in their financial life as they are in golf.
Lastly and maybe most important, golf provides a handicap system that permits comparison of one golfer to another. Not so with financial planning. Comparison is meaningless. If you get what you need and want, you have won.
Don Shaughnessy arranges life insurance for people who understand the value of a life insured estate. He can be reached at The Protectors Group, a large insurance, employee benefits, and investment agency in Peterborough, Ontario. In previous careers, he has been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.
Please be in touch if I can help you. firstname.lastname@example.org 866-285-7772