Investing Is NOT A Plan
“If you want a guarantee, buy a toaster.” - THE ROOKIE
written by Boaz Yakin & Scott Spiegel, directed by Clint Eastwood
(3-minute read)
Just because you “have a guy” who is investing your money doesn’t mean you have a financial plan. I realize I’m that guy to some people but, hopefully, my clients know that their investments are only one of the aspects that makes our relationship worthwhile.
After a recent conversation with a friend, I realized that many people assume that investing their money for the future constitutes a good plan. Once they dig a little deeper, they realize their plan consists of having a bulk of their invested money crammed into one stock.
Folks, this is not a plan.
INVESTING IS NOT THE MAIN CHARACTER
Yes, investing for the future is usually an important part of your financial plan, but it plays a much smaller role than you think. There are so many other roles to cast in this show. That’s like saying “If I only had this one actor, then everything else will work out perfectly.” No it will not.
One good actor isn’t going to make a bad production run smoothly. Did you forget about the importance of a good DP? What about the Grip? Don’t forget about the Art Department. Some shoots run efficiently thanks to the hard work of the Location Manager. Also, don’t f**k with Teamsters.
Your future plans are dictated by your current strategy. These strategies involve things like your personal budget and cash flow, savings, tax planning, career planning, debt payments, mortgage analysis, student loans, estate planning, retirement, social security, and myriad other life events that pop up.
Some of these may play bigger roles than others. So don’t ignore the P.A.s; they’re important too!
WRITE MULTIPLE DRAFTS
Writers know that it’s not necessarily the first draft of a script that’s important. It’s the first 20 drafts they write before it really starts to take shape and make sense. Your first investment might not make sense either. It will probably take you multiple tries before it starts to click.
But, again, it’s not just the investments. Preparing for your life events takes time. You should constantly be rewriting your financial plan. Things will change and life will happen. These changes will involve more than your investments. When these changes happen, write a new draft. Cross some things out. Add a few new ones. Edit your plan. You’re not going to delete the character (investments), but you will be editing around it.
A lot of preparation goes into creating your financial plan, just as it does for a new creative project. For writers, it’s the research and outline (you do outline, right?!). For directors, it’s the pre-production prep. Some of the financial planning prep work involves investments. Whether you’re a DIYer or you’ve hired a professional, you’ll still want to do research to see what, and who, is appropriate for your situation.
NO GUARANTEES
Investments can help your future plans tremendously, but you shouldn’t solely rely on them. Just like assuming an A-list actor will make your project a success, there are no guarantees.
This is why you should perform your due diligence, not only with investing, but everything else that involves your financial plan. If your investments don’t perform as well as you hoped, then having other “characters” in the mix can still move your story along and help you achieve your goals.
There are many moving parts in a good financial plan. They’re all working together for the same common goal: to help you achieve what’s important to you. Don’t skimp on one area because you think another one is the most important. There are many other areas where you can focus in order to make your plan a success.
If you’d like more information about Financial Planning, you can schedule a complimentary meeting HERE.
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