Your Plan is the Path

I was listening to Gordon Brown on Radio 4 this morning on the way to our office. He was in charge when the financial crisis of 2008 was happening. He said that felt bad, but this feels doubly bad for the population who are in fear on two counts this time; 1.  Our Wealth but also, and most importantly, 2. Our Health.

It is indeed unprecedented, although is not entirely to be unexpected given the pace of increase in global travel which many more of us have been able to do (up until now), whereas as a lot of our older clients will agree, frequent flyer traveling used to be the domain of a much smaller minority.

In case it isn’t obvious; None of us planned for this, including governments, health care professionals, airlines, the insurance sector, ventilator manufacturers, even loo-roll manufacturers. OK, maybe some did. The Amazon drone delivery seemed ridiculously futuristic, yet now? and there’s a Japanese drug company already on the right track with a treatment? No doubt we’ll be reading about it soon in another Michael Lewis tell-all expose book, then movie. Let’s hope.

The key point I want to make is this; Your Plan is the Path

Your financial plan which we made together does have mechanisms in place that will help you get through this tough patch with the coronavirus and the financial market volatility. The key is not letting heightened emotions and bad headlines steer you towards decisions that could have a negative impact on your finances long after this crisis has passed.

Easier said than done, you say?

These three steps will help you remember why you have a plan in the first place, what it’s designed to help you accomplish, and how we can help.

1. Acknowledge your emotions.

Worry. Anger. Uncertainty. Nervousness. Maybe even a disbelieving chuckle or two at the craziness of it all.

Whatever you’re feeling right now is OK. We understand that your financial concerns are just one part of a very complicated and very personal situation involving your family, your work, your health care, and your basic needs. Add in the anxiety we’re all feeling about the situation in the wider world and you wouldn’t be human if your emotions weren’t a bit jumbled right now.

So please understand that when we advise you to take emotions out of your financial decision making during a crisis, we’re not advising you to ignore what you’re feeling. On the contrary, we encourage you to talk through your feelings with your spouse, children, work-colleagues, and other close friends or family

2. Tell yourself your story.

Once your feelings are out in the open, it will be easier for you to think about the financial part of your situation with a clear head.

Try, for a moment, to set aside the market swings that may have been dominating your news feeds for the past few weeks. Instead, think about the reason that you started working with us in the first place.

In those first few meetings, we didn’t talk about how to time your investments to world news or market fluctuations. Instead, we talked about you. About the life you desire for you and your loved ones, and how to get the best life possible with the money you have.

And finally, we discussed how our Life-Centered Planning process can help you get that best possible life with the money you have.

3. Prioritise Now, adjust for Soon, stay on track for Later.

Because we plan for our clients’ lives, not just their money, we always take in a wide view of financial progress. Today’s big market dip will look like a blip with a multi-decade panoramic perspective. But “stick to your plan” doesn’t mean we don’t do anything during a major market correction, especially if you’re at or nearing retirement age. It means that the moves we contemplate are based more on your upcoming life transitions than they are on unpredictable market movements.

To keep yourself focused on things you can plan for, grab a sheet of paper and sit down with your spouse. Divide that sheet into three sections:

Now: Financial concerns that need to be addressed as soon as possible, such as paying next month’s bills, a necessary home repair, or a health care issue.

Soon: Important items 6-12 months out that you still have time to prepare for.

Later: Everything else.

Most of these items will already be things we’ve discussed and planned for over the course of our work together. But it’s possible that recent events have filled up your Nows and bumped some Soons into Laters. We deliberately designed your Life-Centered Financial Plan so that it can be responsive to these changing priorities and transitions while still being sensitive to larger economic realities.

To remind yourself of what you’re truly planning for, it might be a good idea to revisit your most recent financial plan. We’d be happy to email you a copy you can review. Or call us up and we can work through this exercise together and see what adjustments we should think about. The current crisis might alter your path a little bit. But your destination may still be the same.

Stay well, stay safe and stay put!