Life is uncertain. We cannot control many of the things that have an impact on our lives.
Some of the most important numbers that you would like to know are unknowable in advance. We don’t have control over these numbers. How long will I live? How much will I spend on utilities in 20 years from now? What will investment returns be in the coming week or month? We just don’t know.
We may not be able to have exact answers for many of these, but we can make informed and educated guesses for some of them. Most of the inputs into a personal financial plan are nothing more than our best estimates about the future.
Richard Nixon hinted: “I have always found that plans are useless, but planning is indispensable.”
There is no predetermined course in life that we can plan for in advance and cling to until the bitter end. Life unfolds and we need to respond to these unfolding events and changes in a sensible and flexible manner.
“Every battle is going to surprise you. No plan ever survives contact with the enemy” – Dwight D. Eisenhower.
The details of a plan which was designed years in advance are often incorrect, but the planning process demands the thorough exploration of options and contingences. The knowledge gained during this probing is crucial to the selection of appropriate actions as future events unfold.
We crave certainty. Demand for certainty is high even when we know that there no such thing as a reliable crystal ball with which to divine the future. Certainty is an easy sell, but impossible to deliver. Accepting the reality that the future is uncertain and unknowable will allow you to step into and commit to the process of planning. The plan is a moving target but the planning process, managed properly, can react to ever-changing conditions to flex and attempt to fit the plan to reality.
Goals are what we want to happen. Transitions are what’s happening anyway.
The ability to shift course when needed is essential in life. We have freedom of choice. You can always adjust your plans as the situation warrants. We do not need certainty about the future in order to make wise decisions. Similarly, we do not have to respond to everything that is happening in the short-term. That would lead to lapses in judgement and poor decisions.
Reality requires us to make decisions. The quality of your decisions will determine the quality of your life. The process of planning requires flexibility.
“Whatever success I had in life has had more to do with my knowing how to deal with my not knowing than anything I know.” – Ray Dalio
You have to plan for your future objectives. The plan needs to be feasible and broken down into actionable “next steps”. Life is not static. Commitment to the process of planning is far more important than the plan itself.
The above article was written by Marius Kilian.
* Agency Consulting Group, “Plans are worthless- But planning is everything”, agencyconsulting.com
* Principles For Success by Ray Dalio, YouTube