There is a famous quote from the former Heavyweight champ that applies in so many avenues of life; “Everyone has a plan until they get punched in the mouth”.

 

Tyson was a feared boxed in his time who was renowned for his ferocious upper cut that ended many of his fights. He was often called a brawler but he had great skill to work his way to get what he wanted- the clean shot for the win.

 

Now this is not a treatise on boxing or Mike Tyson but rather a note on the “plan” and “getting punched”. Investors absolutely should have a plan but one that is rigorous enough to take the inevitable punches that are coming. Life/The World/Luck are all going to position you for that clean shot to your jaw at some point, often many times. How your plan works to survive that can make all the difference.

 

Investors are often sold a “Plan” (capitalized for effect to make it seem that much more official) that is built using your responses to questions that are so meaningless that the question exercise is nearly useless. “How would you respond to a drop in your RSP of 10%” has about as much value as asking how they would feel if tomorrow was 10 degrees colder.

 

A few of the real questions to ask are:

How would you survive if you lose your job?

What happens to your future goals if you don’t save enough money now?

Can your family keep the same level of living if you/your spouse became disabled for a year or longer?

 

There are many more questions to ask but you will notice not one of them is investment volatility related. What is important to my clients is do they have enough, are they secure enough to protect against major upheaval, is their lifestyle going to be affected with any number of major changes?? These are the “punched in the mouth” parts of life that everyone deals with.

 

An investor needs a full plan that focuses not only on their current financial state (income, expenses, savings, protection strategies) as well as their goals for their future financial state (family, estate, growth of assets). This plan should be regularly reviewed and updated. Consider it like a map where you have a destination in mind but the road to get there is cloudy and there is construction that pops up along the way.

 

If you are an investor and you find your discussion is centered on the here and now and ignoring the destination, ask yourself whether that is the right “plan” for you and if your plan will survive a Tyson-like upper cut. I work with my clients to build the plan that can withstand an upper cut because I know it absolutely is coming. I don’t know when and I don’t how but I do know it is.

 

If you want to chat about building a plan for you and your family, contact me today.

 

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