Financial Planning: To do or Not to do?

There is so much to discuss about financial planning. Why do so many fail? Many blame it on the other guy…. on the job opportunity…. on the lack of luck. I wonder? Is it really somebody else’s fault or is it just the little things we don’t pay any attention to during the day? I had someone call me today and tell me what they were doing after they decided to do it and it absolutely did not fit into their financial plan. Oh, but it’s a good deal! It’s a once-in-a-lifetime find! It’s a great investment! All reasons to do something that otherwise makes no sense. Usually when I hear those three statements it means that they can’t afford it, should not be doing it or their plan dictates that it is not in their best interest but they’re justifying an action not based on financial soundness nor based on their financial success. See we make thousands of choices or hundreds of thousands of choices in our lives that effect risk, cash flow, worry, success and failure. Each decision by itself seems so small and so insignificant that we don’t even pay attention.

So insignificant

But just like a snowball rolling down the hill that in the beginning seems so fragile, so insignificant, yet at the bottom of the hill is so onerous and totally devastating. See if we make the wrong decisions, get in that habit of making easy decisions which leads us away from the four tenets of retirement. We are much like the frog in the pan that never realizes it’s getting boiled. We have to be intentional if we want to be financially successful. We have to pay attention, make choices and be focused on an end result not a short-term want or even worse just a bad habit. I don’t care how good of an investment something is. If you cannot afford it you should not do it. I love ice cream. But if I ate it every time I would enjoy it, not only would I be unhealthy, it would affect my budget adversely, my health would be worse and my life would not be better. But I would enjoy it.

Emotionally addictive

Spending money is much the same way. It is an emotionally addictive action that can be so devastating to long-term financial satisfaction.
So the next time you come to me and say the following:

• it’s a once-in-a-lifetime opportunity,
• it’s a good investment,

• it is beautiful. . .

Remember those are not reasons to buy or spend money. Always ask yourself the three questions:

1. Is this improving my financial plan?
2. Am I doing this because I’m emotional?
3. Is this increasing the risk of failure to reach my goals?
Remember that more stuff does not mean more happiness. I literally believe that there’s almost an inverse relationship between stuff and happiness. There’s an absolute relationship between stuff, chaos and worry. Also there is an absolute relationship between simple, purpose and having a peaceful life. We can justify anything, if there is no plan in place it is easy to take actions leading to financial mediocrity. I want you to ask yourself the following question. What is more important pleasure/fun that may lead nowhere or responsibility/simplicity that leads us to our goals, success, and less of worry.

It does make a difference

Sincerely,

Wayne von Borstel, CLU, ChFC, CFP®, MSFS
Personal Financial Advocate

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