#5 Not Creating a Financial Plan that is Adaptable
“The same wind blows on us all. What determines your course is the set of your sail.” —Jim Rohn
People often approach me with a question or two about financial matters, and while I don’t condone providing drive-by financial advice, I always appreciate the fact that someone valued my thoughts enough to ask. Of course, most of the time, I am unable to provide a response because the true answer would require knowing much more about the current financial situation, and that’s why I usually encourage people to focus on creating a financial plan for themselves.
Think about building a house. I ask people all the time,
“When you begin the process of building a home, what is the first thing you do?”
Many people honestly say they don’t know, while others say, “Lay a good foundation.”
The truth is, the very first thing you do when building a house is you have to engage an architect to help you draw up blueprints. This is a critical step because the blueprint serves as the guide for every other decision. This is why many people who have built their own home know that getting the blueprints just right can be a challenging process. However, no one questions how critical it is to have the blueprints finished before you begin building.
This is what it can be like in you finances too. Many of us have a vision of what we’d like our lives to be like—while raising children, during our working years, and living out our retirement years. As we move through these phases of life, the strategies we need in our financial lives will change and require adjustments. Life is not static—it’s dynamic. You need a dynamic financial plan, one that can change as your life changes.
This is where many people get stuck. They believe that if they’re going to create a financial plan that it has to be perfect. I’m here to tell you that no perfect plan exists. Sure, there may be some changes that are easy and require no real effort to implement. Other changes may be much more difficult. Sometimes you find yourself planning for something like your retirement in the midst of political, social, or economic change. There’s no doubt that these challenges can be daunting for some of us. The important thing is that your financial plan is adaptable. Falling into the trap of needing your plan to be perfect for each and every scenario can cause analysis paralysis—and you end up doing nothing.
I said earlier that life is not static, and I truly believe that. Right now, we find ourselves in a season of uncertainty. Our nation is about to elect a new President, Britain just voted to exit the EU, Radical Islam continues to be a threat to national security…. I could keep going. The media will never be short of a crisis to promote. My challenge to you is that if you want to enjoy your retirement years, create a solid financial plan—one that is adaptable—and stick to it. Tune out the noise and stay focused on the things you can control.