The 90-90 Rule
In programming there is a law credited to Tom Cargill at Bell Labs.
The first 90 percent of the code accounts for the first 90 percent of the development time. The remaining 10 percent of the code accounts for the other 90 percent of the development time.
There should be a similar law in financial planning. The difference would be that the remaining 10% is never achieved. It is more like the first 90% uses 90% of the resources. 90% of what remains uses another 90%. And so on and so on.
There is a difference between programs and life
Programs have finite limits and finite possibilities. Life is not so limited.
When there are no hard edges to a problem space, anything is possible and everything may change. Those factors make planning a challenge. The challenge is to do it continuously and with enthusiasm as you correct mistakes, adapt to changes in the world, and discover more about yourself and your purpose.
Adapt to life.
You cannot impose hard controls or limits on life. Accept that, and learn to manage change. Optimize is the goal, precisely perfect is a delusion.
We all manage life using simple tools.
Begin with understanding your limitations, your resources, your intentions, wants and ideals. Build a strategic plan that falls into those limits. Targets. Things like I want to retire someday. I want to educate my children to the best of their abilities. I value time to do more than earn a living. I value my relationships. I want to grow as a person.
The tactical part of planning attaches tools and resources to the targets. Tools are efficient. They are the accumulated experience of our people built into a package. Like buying a life insurance policy is easier than creating a co-op to share risk. Find tools that fit both your needs and your resource allocation.
Logistics. The just do it part.
Then the important part. The three Rs
Record, review and revise. If we know that no plan ever lasts, and 90% done is an illusion, we improve our expectation for a successful life. If we have a plan, record the outcomes and how we have changed our purpose we have a chance. Study the outcomes and the surrounding world for intelligence about what choices there are now, and revise to re-optimize.
Good outcomes evolve
When you begin, planning is a top down approach. Here is perfection. Create a process to implement and wait.
Life is not like that.
Successful plans are bottom up. Keep doing what works and stop doing what does not or what becomes obsolete. You need the three Rs to make that work for you.
Planning is a process, not an event.
Planning is a necessary part of life and as long as you don’t believe any particular plan or tool will solve it for you, you will be okay. Continuous evaluation of purposes and resources will tend to get you where you need to be. Douglas Adams has it:
I seldom end up where I wanted to go, but almost always end up where I need to be.
Processes that evolve, work. Learn how to evolve.
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