Planning for the Probable vs Planning for the Confirmed

Dear friends, many of you would have seen or heard of that old saying, 'Failure to plan is planning to fail'. In my days as a financial planner, I've seen plenty of examples of people that have a 'failure to plan'.

It is said that insurance plans for events that MIGHT happen, for instance, a terminal illness, a stroke, an accident, etc. These things are NOT possible but low on the probable scale. That's why the insurance payoffs and sum assureds are high. Think of it as striking the unlucky lottery!

Now, there is also retirement planning and investment planning. These things plan for things that are CONFIRMED! Now, before you turn on me with the pitchforks and accusatory looks, you'll have to understand, that investment is one of the ways your savings can match or beat inflation. The 2nd thing is that, there are only so many years left before you would not be able to draw the stable salary that you are drawing today. I'm sorry to say, but people pointing at Warren Buffet being active at 90+, he's a massive outlier. How many of you would want to continue working for money, to put food on the table, otherwise you'll go hungry or the lights go out or before your health catches up on you? I'll love to tinker with bicycles still, but it's a big difference from 'working or else I won't get paid' vs 'working with something I like to do'.

In addition to this, there are also other things one can plan for, and that's inflation. Inflation is confirmed, it's an absolute. Year after year, your excess funds are ground to the equivalent of dust (very slowly) in the banks, that is, if you do nothing about it. I find also the culture of 'saving' quite counter productive - 'saving' indicates keeping what is left after the month, which also indicates that on some months, there might be nothing left! That's honestly not good.

So, ultimately, what a financial planner can do for you:

1. come out with sums and projections and estimates on how you can have enough to last you thru your retirement years....
2. come out with products to protect your funds from inflation..
3. plan for contingencies to protect your family, in the case that you are no longer around. As in, you have to 'depart' prematurely

And more, such as estate planning and so on.

What I find, helpful, psychologically, for the products we provide, is that it's charged monthly, which the client can count it as an 'essential expense'. As one works and deals with the amounts that one can manage with at the end of the month, paying your 'future' self first at the start of the month is a good practice.

This is actually what happens in the fable of the Ant and the Grasshopper.

If I had to end off, it's just this:

You can be an ant or a grasshopper.

Winter is coming.

How much grain do you gather to ensure you can last?