People Like Predictability, But

People can have predictability only within very narrow limits.

Why? you ask

Predictability relies on what we have already seen and what we can anticipate will happen in the future. Seems easy enough. Take what’s going on, project it, and off we go. That works within the limits of what you know and what you can project into the future with some certainty.

You might go even further and say what you know or believe is in two parts.

  1. Near certain. Things like pensions, lifestyle elements, income taxes.
  2. Certain but variable in a range. Things like inflation, tax rates, investment yield
  3. Possible. Like continued life, continued health, and no unusual needs

It is possible to build projections knowing these and possibly a few others that fit the same mold. For the variable choices building a hive of outcomes based on different guesses and you should be able to get a clear enough idea of the range of possibilities. From there you can defend the adverse, and exploit the opportunities. Or at least know enough to recognize them as the come along.

Most plans fit within that structure.

What if?

You cannot plan the future with precision or even inside a knowable structure.

Why not? Because the future will contain elements that do not yet exist. Even 10 year plans will encounter previously unknown problems and opportunities.

Ben Carlson published an interesting article yesterday. Predicting the future is hard.

Ben referred to a defense department memo from early in 2001

2001-04-12 To George W Bush et al re Predicting the Future

It points out that even people with vast access to information and a narrow addressable set of conditions are unable to see the future clearly. The basis is a memo generated in the American defence department just a few months before 9/11. The idea of being humble when projecting the future paramount. We should anticipate that we cannot know the future.

The defense

Know what resources provide you with adaptability and influence. Money is one. Good health another. Attitude. Relationships.

Learn to assess risk. Not only its likelihood, but its effect. Low probability high cost needs attention

The bits to takeaway

When you don’t know, you build resources and reserves

When you don’t know what will happen, pay attention and be prepared to change your approach

If you can have just one intuitive skill, choose adaptability.

Never stick with a tactical plan plan when the essential variables have changed.


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I build strategic, fact-based estate and income plans. The plans identify alternate ways to achieve spending and estate distribution goals. In the past, I have been a planner with a large insurance, employee benefits, and investment agency, 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. I have appeared on more than 100 television shows on financial planning have presented to organizations as varied as the Canadian Bar Association, The Ontario Institute of Chartered Accountants, The Ontario Ministry of Agriculture and Food, and Banks – from CIBC to the Business Development Bank.

Be in touch at 705-927-4770 or by email at don@moneyfyi.com

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