facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Set Sail Thumbnail

Set Sail

When I set out to be a financial planner in 1996, I was in a minority of advisors.  Most “advisors” in financial services were really selling products, be that insurance or investments, and any planning was done only to prove the value of the products sold.  It would be wildly overstating the progress made in this area to suggest that financial planning is now the norm.  But much progress has been made.  The current state of advertising in financial services would suggest that you need to do one of two things – lower your fees by doing it yourself, or, get help from someone who will actually help you plan your future. 

I have always maintained, adamantly, that financial planning is the only way in which financial services should be delivered.  No advisor can truly say that a certain solution fits your situation unless they know your situation.  And knowing your situation means knowing you. There is no better way to do this, than through the exercise of building a holistic financial plan.  

Can’t some artificial intelligence app do that for you?   AI will indeed provide a great deal of advice in financial services. In fact, it already is, and with much success.  But, human beings don’t always make the most logical decisions.  We make emotional decisions.  Even though money is clearly about math, a decidedly left-brain subject, the majority of money decisions are made with our heart and perhaps our gut.  And so, more often than not, the kind of advice we need is more akin to what a therapist might offer and less like what comes out of financial software. 

It is obvious that money is one of the most emotionally charged things we deal with.  No matter how much we have, or how little we have, money decisions provoke stress.  And the list of things we would do, if we just had more, is endless.  We buy lottery tickets, work multiple jobs, invest aggressively, and participate in dodgy tax schemes, hoping to improve our life by increasing our wealth just a little, or better still, by a lot.  And the pursuit of more money is tiringly endless. One word that we seldom use when it comes to money is ‘enough.’

Without digressing into one of my favourite topics – happiness – let me just remind you that unless you live in poverty, money and happiness are not connected.  I would argue in fact that happiness is recognizing that whatever you have, it is enough.  

But the question “do I have enough?” is not so easily answered.  Life is full of decisions in which a key consideration is preparing for or protecting a future that may or may not play out.  We don’t know how long we will live, or what condition we will be in when we get older.  We don’t know how much help our children, or parents, will need, if any at all.  We don’t know how our relationships will play out.  We don’t know how markets will perform, how interest rates will change, how our jobs will go.  We know almost nothing.  But, we plan for the life we want, and we push money into an unknown future hoping for the best.  

Then, because we are human beings full of emotions, insecurities, hopes, fears, and irrational thoughts, we often make decisions that seem completely at odds with what the numbers are trying to tell us.  One may argue that this is simply a matter of putting more emphasis on the here and now and less on the unknown future.  But it’s more complicated than that.  Sometimes our most irrational decisions lead us through a door and into a different and better world.  Sometimes hope is the right strategy.  Sometimes that voice of caution is worth listening to.  Sometimes.

Against a backdrop of uncertainty, why then have a plan at all?   Because, and I will choose one from a thousand quotes that say the same thing, “You are the captain of your own ship.” (Michael Josephson).  We should, at all times, be aiming our efforts, our thinking, our hopes and dreams, in the direction we really want to go.  Moving forward requires you to know which way is actually forward.  A financial plan is not a fixed blueprint of your future.  It’s a living document.  It’s a flight plan to a destination that is unknowable, because it is forever changing.

Grab your compass with your vision of the future providing the direction, set your course by creating a financial plan to get you there and then set sail with the assistance of a crew who can help you navigate whatever lies ahead.  

You choose the direction and provide the orders to set sail.  In the words of Captain Jack Sparrow, ‘Bring me that horizon.”