We plan, God laughs – old Yiddish proverb
I tell every new client that the moment the ink dries on their financial plan, something will change. It is amazing how fast changes happen for some; a new job opportunity arises, an offer is made to sell the business, a parent needs care, or a personal health issue rears its ugly head. I call these curveballs, the things we didn’t expect to happen.
Curveballs can turn life on a dime. Suddenly your goals become crystal clear, and certain goals take immediate precedence over others. That appointment with the estate planning attorney you have delayed for years is now booked. You look at your will with a fresh set of eyes and wonder – what was I thinking when I signed this? Do not beat yourself up. Our preferences and desires change with time. Children grow up, marriages begin or end, grandchildren arrive, heirs die, and people change. So too will your estate plan.
Everyone has a plan ’till they get punched in the mouth – Mike Tyson
Sometimes, life throws a nasty slider; such as the loss of a spouse or diagnosis of a terminal illness. These are not the times to make major changes in your financial life. I’ve seen aggressive financial sales people swoop in on recent widows or widowers. I cringe to think what may have happened to them while they were blinded in grief. When a client loses a spouse, I recommended no big financial decisions for at least six months, possibly a year. The time to sell the house or cut household expenses may come, but give yourself the time to process such a major life change.
But perhaps there is wisdom in the moment of clarity a curveball provides. What if there was a way to experience such clarity now, before life turns upside down? There is a visualization technique I have used to set my own priorities in life. This exercise requires some real self-reflection, and I have found that does not come easily to most people. But if you are willing to go deep, this exercise can help prioritize what matters in life and cut out most of the fluff and distractions.
George Kinder is the pioneer of a branch of financial planning he calls Financial Life Planning. He uses the following Three Questions with new clients in the first meeting. I am paraphrasing Kinder here.
Question 1
Imagine that you are financially secure, that you have enough money to take care of your needs now and in the future. How would you live your life? Would you change anything? Don’t hold back on your dreams. Describe your ideal life. Consider in detail how you would spend the years, months, weeks, and days.
Question 2
You are still completely financially secure, but you visit your doctor who tells you that you have 5-10 years left to live. You will not be in pain or limited in any way by this disease, but it has limited your time on earth. What will you do with your remaining time? Would you change your life and how?
Question 3
Now your doctor tells you that you have one day left to live. Notice the feelings that arise as you confront your mortality. What dreams were left unfulfilled? What did you miss?
I have done this exercise twice. The first time, question three made it abundantly clear that I missed having children. My son was born about a year later. The second time precipitated my move to Ritholtz Wealth Management. Both times have been life changing, but the process requires some deep soul searching and can lead to painful decisions.
Whether you choose to do the visualization work today or not, life will throw those curveballs. One way or another, we are all moving through this life and all of its beautiful and painful moments. Curveball clarity helps shed superficial goals like accumulating a certain size portfolio or beating the market index. In the end, we all wish for more time with our family and friends. Why not start living that life today, while there’s still time?
