A mathematician of our time.
If someone makes a list of the twenty greatest mathematicians of the twentieth century, Alexander Grothendieck is undoubtedly a name that will come up in the conversation. Some would argue it is a name that would come up in a list of the top one.
He made huge contributions to many fields. Using insights from several fields, he essentially changed the paradigm for those who followed.
It is often hard to follow a mathematician’s reasoning
Grothendieck’s math certainly fits that condition, but his method of reasoning about how to attack a problem is easily described and a bit subtle to apply. It describes the problem most people have with organizing plans of any kind. Especially financial plans.
Find the right level of generalization
For most of us that is a near-meaningless statement.
Make sure you see the big picture, but with enough detail to make decisions. Most people get caught in details and miss some parts they need.
We are caught up in specific tasks, methods, and resources. The idea of generality is supposed to fall out of all the specifics as they combine to govern our life. Specifics won’t take us there because they require a general purpose to establish their relevance.
Starting with tools and tasks ignores the ability to establish a strategic vision.
Strategy without action is not useful either
Strategy takes you nowhere by itself. Strategy helps assess wants and needs. You cannot have or do everything. It helps assess resources that can aid in the achievement of goals. It establishes priorities in both resources and time.
Strategy accomplishes nothing without action.
Finding the proper level of generalization
In the case of financial planning that involves finding a point where strategy, while incomplete, is well enough developed to recognize the problems and opportunities in the current situation. It need only be well enough developed to offer assistance in comparing the cost of possible solutions against the cost of doing nothing.
The first layer of any financial plan is control the uncertain
- Have a will and powers of attorney so there is action possible in times of trouble.
- Have a long very general view so you are always working toward something
- Have a short term plan. A budget
- Recognize that not every month is like every other. Have a cushion.
- Have an emergency fund to deal with large and unexpected variations
- Recognize the ability to earn money is your most valuable asset.Without income your plan will not succeed. Insure the money.
The long run is too hard to see all at once.
No 25-year-old understands the retirement and estate situation. If the long run generalization is set too high they will be unable to see their immediate and valuable tasks as the priority. The wrong kind of life insurance is one example of a mistake. Get rich quick investment schemes another.
Know enough to be sure everything is included but not so much as to hide the important parts. Start with the most imminent tasks. Do not allow values for the distant future hide immediate steps. The other steps will become obvious as you go.
The long run doesn’t matter if the short run fails
Start with the obvious things.
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