14 Oct 2016 Flexible and Standing or Rigid and Flat?
Ever notice after a hurricane how some trees remain standing while others have fallen? More often than not it’s the rigid, unyielding trees that have fallen, while the more flexible survive.
This fact of nature provides an important lesson for anyone who wants to plan for a better future. Many people dismiss planning as a futile exercise given such an unknowable and unpredictable future. Others would tell you they have a plan, but if pressed, couldn’t tell you when they last reviewed it.
General Dwight D. Eisenhower once said that “In preparing for battle I have always found that plans are useless, but planning is indispensable.” You will notice that “plans” is a noun, or a thing, and as such is useless. A noun is something with a fixed, inflexible meaning. “Planning,” on the other hand is a verb. It is active, changing, and ‘flexible.’
Life planning is an ongoing collaborative and disciplined process that includes, as a vital component of that process, flexibility to adjust to an uncertain future. It is not a glossy five-pound reminder of a one-time painful process of cataloging every financial detail of your life. Nor is it simply a collection of fixed dollar amounts occurring at fixed points in time.
Great planning not only recognizes that things will change; it also builds in flexibility to adapt to those changes and threats as they reveal themselves. Let’s say you learn that an important cash flow planned for in ten years will be only half what you earlier expected. If you and your advisor have done a good job planning, the remedies for bringing your plan back into an acceptable range of confidence as well as the order in which you want to employ those remedies are included in your plan. If you are a saver for instance, saving more would come naturally. If you find fulfillment in your work, pushing retirement out a year or two more would be easy. And if market risk does not bother you and it proves effective in increasing your plan’s confidence, then adding more equities to your portfolio mix would be a cinch.
Financial planning that stops with questionnaires or sliders on computer screens misses far too many of the vital resources you can bring to bear on your plan. Without personal relationship and ongoing conversation there can be no real understanding of you or your life’s purposes and how you might best align your resources to accomplish them.
For instance, every goal can be stated in a range from acceptable to ideal. ‘Ideally I would like to retire tomorrow, but I would be willing to work another ten years in order to accomplish more important goals.’ Did you notice that this person might not be in his or her ideal career? Most Americans aren’t. But in this case she says she is willing to endure another 10 years to accomplish other more important goals. Once again, what if the planning process took a broader, more flexible view of work, just as it does with goals ranging from acceptable to ideal, rather than somewhat arbitrary points on a grid?
Additionally, our resources are far more significant than we often give them credit. While difficult to quantify, we have talents, skills, and energy as well as time and passion to bring to bear on our endeavors. What if rather than simply earning a living, we aligned our vocation with our human resources in a way that maximized our talents and passions to achieve our purposes? How much more could we accomplish?
While these concepts may sound idealistic, they are not. When we ask our clients to be more flexible in their planning, their imagining, and to let go of their human inertia and embrace a concept that significantly more of their options are discretionary than they might think, incredible things begin to happen. When they begin to see their plan not so much as rigid forward-looking budget designed to ensure the basics, but more like a living storyboard capable of bending and adapting to the challenges ahead, the process of planning takes on life-enhancing value, never before experienced.
