27 Sep 2013 Where are you going?
It’s Friday, and another week is ending; the 39th week of the 13th year of the new millennium to be precise. As we enter the fourth quarter of the year we might ask; are we 39 weeks closer to our goals, or have we simply repeated a weekly cycle 39 times only to find we are still in the same place?
The answer is likely not one or the other. We all like to think we are making progress, and in many ways we probably are of a sort. But, if we are honest, we likely spend too much of our day hopping from one problem/diversion/project to the next, rarely if ever, taking stock of where we are or where we are going. And the ironic thing is, we have incredible tools to tell us precisely where we are, yet we have never been more lost.
We spend huge amounts of time and energy measuring, comparing, and competing, but to what end? We compare our wealth to others as a measure of success and status. We invest to increase our wealth, measuring our progress against arbitrary benchmarks. But rarely do we take the time to consider sufficiency or appropriateness. We are so busy investing and chasing that we don’t take the time to consider where we are going.
In fact the measuring and the competing are in vain without purpose and direction. Without a plan comprised of goals, objectives, and priorities one is basically lost. No amount of speed or skill in beating benchmarks or peers will ensure satisfaction or happiness in accomplishing the things in life we quietly long for. A ship on the ocean can sail or steam faster than any other vessel, have the best measuring and location devices available, but without a destination she is no better off than the slowest and most hopelessly lost of all vessels.
Jason Zweig sums up our condition quite well when he says, “humans perceive reality in short bursts and streaks, making a long-term perspective almost impossible to sustain – and making most people prone to believing that every blip is the beginning of a durable opportunity.” Tempting blips in both investing and in life so easily take us off course, if we had one to begin with.
The solution is simple, yet execution proves too difficult for most. It has been said for eons that those who ‘fail to plan, should plan to fail.’ The simple fact is that our wiring works against us when it comes to planning and sticking to it. This point brings us to the single most important reason for a financial planning advisor.
The planning financial advisor doesn’t create his client’s plan any more than a ship’s navigator creates the charts or the destination for which he aims. The navigator continually measures progress against his destination while accounting for offsetting currents, winds, and tides.
Similarly, the planning financial advisor continually stress tests his client’s current position against all potential market forces that work for and against her, plotting a course that has sufficient confidence of meeting not only the final destination, but all those important waypoints along the way, and ahead of schedule when safely possible.
The planning financial advisor has both your best interest at heart and a plan to ensure you get there. Because you have given him points to steer for, he can objectively demonstrate to you the potential cost or benefits of those tempting blips that invariably pop up along your journey. He has more important points to measure against than the blips alone – he has your goals.