Decisions! Decisions!

Financial outcomes depend on decisions

People usually get that. The ones that don’t fall into the magical thinking group. They have uneven outcomes.

Clearly then, making good decisions is a good life skill.

How do we do that?

Notice that decisions attached to no purpose usually turn out badly. There are clear reasons for that.

  1. Most decisions involve process, resources and tools to get the hoped for result. If the outcome is not clear, it is unlikely the proper resource group, the proper tools and the proper process will be found by accident.
  2. Tools are the distillation  of humanity’s experience with a particular problem. It is not smart to reinvent the wheel. Saving and investment have been proven as a process to create future income. Tools make it efficient. Efficient tools get the outcome with fewer resources.
  3. Processes are dynamic. For long ones, there will likely be adjustments. Few plans turn out exactly as expected. If the outcome is unclear  people cannot see the need soon enough to make a difference.

Build a template

What do you want? When? Who helps? What resources are available? What is the measurement system?

Templates have two parts

The problem definition and the solution design.

Defining the problem matters most. A good start nearly preselects the how of doing it. Good problem definition provides motivation. It is easier to do things you understand.

Solution design ties tightly to the defined purpose. The tools and processes are more specific. Best of all you don’t become confused by what you did not choose. You know why you picked what you did.

Setting reasonable parameters.

Know how the resources work. In a Financial plan there is no reasonable expectation that you can earn 20% on your investments over a long time. Realistically, 3% after inflation and taxes is superb.

Understand time. Especially notice if you have a guarantee of getting a lot of it. Didn’t think so. After that observation look at patience. All good outcomes include patience.

Great wealth has an enormous time frame. They look at family money, not yield. They think in centuries, not months. One bought over a hundred acres in a major city. They built some rental properties with a view to paying expenses while they waited 100 years to develop it.

Leverage is an impatience gig.

Most wealthy people use leverage sparingly. They see the future as inherently unknowable while the debt is rigid. Big variations in quoted value are immaterial if there is no debt to equity ratio agreement.

Few plans fail when there is a clear purpose, careful methods, discipline, patience, reasonable expectations and ongoing monitoring.

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.  866-285-7772

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