I mentioned before my military service in a previous post and the impact it had on my life.
This week Brendan Mullooly, CFP (R) wrote an article about thinking of your financial plan as a Compass not a roadmap. This resonated greatly with me and brought back memories of doing land navigation training.
Basically on the land navigation course you were sent out with the map and a Compass.
As I think back on that process, the most important thing I had on me was the compass. Because the map had key features like topographical features, hills, valleys and cuts and things you could orient yourself to but the most important part was knowing which direction you were supposed to go, whether it was north or south east or west. It wasn’t just going in the right direction, It was stopping in every so often usually fairly regularly to check to make sure you hadn’t gone too far off course. Because going north from the wrong point doesn’t do you any good.
I think about that is the problem I think about that process as it relates to doing business with the RIM Family.
There’s so many tools and advice out there that can help along the way but I think the most important part is the regular meetings that we have where we can inventory where we are, where we’ve been and where we’re going. Thinking about it as a compass we know which direction we want to go we want to go. We want to make more money than we had in the previous time and we want to save it for a particular destination whether it be college, retirement or buying a house.
But if we’re not regularly checking in and monitoring our current set up as a relates to where we’re going we can wander off course in soon enough being down in the wrong area.
Another thing that brings me to mine was time spent on the firing range. If you’ve shot guns or weapons at any point in your life you know that shooting at short targets is much easier than shooting long range targets. That’s why there are fewer snipers than infantrymen.
One of the things that really stuck with me during basic training was the idea of being wrong for short increments is easier to overcome to be off over a long distance. If you think about shooting add a 25 yard target if you miss by few inches you’ll still hit the target. But if shooting at 300 m target if you’re off by a few inches you miss but several feet.
It's the same way with financial planning. In our relationship if we miss and are able to correct it in short intervals we can get back on course. If we miss and don’t course correct and time goes by for years or even decades you could be off by ten‘s or maybe even hundreds of thousands of dollars from where you thought you should be which affects everything you were trying to do.
So what are a couple of core things that we need to focus on a regular basis.
The need to have an idea a good understanding of what or where your money is going.
The need to have a set savings plan & it needs to be automated.
The need to know where we are, want to go and how long we want it to take us to get there.
If we do those things and we check in on a regular basis our chance of success is far greater than the alternative.
Take the long view!