Sailing and Finances article

By Richard A Balch, CFP

Every six months I give a 10-minute presentation to my Business Network International (BNI) group to discuss what my business does.?Keep in mind the meeting is at 8am, so it is important I keep the topic interesting since I deal with numbers.?For one of these presentations, I donned a sailor’s hat on and taped up a nautical chart of the bay of Green Bay and began talking about financial planning.?Here is what I said.

“On any voyage you take with a sailboat it is important to first have a destination in mind and what you want to accomplish with the trip.?You must therefore look at a chart and begin to lay out a track that shows where you intend to go.?Maybe during the cruise, you want to fly a spinnaker sail.?You may want to try some fishing while sailing and troll for a steelhead trout.?Maybe practice a man overboard drill.?This is very similar with financial planning where you state an objective: ‘retire at age 65 and be financially comfortable to maintain my current lifestyle without having to go back to work.??Visit my grandkids at least 2x per year as they live in another state.?Go to FL from December through March…’?And so on.?To make a good objective it is important to start early and make a bucket list and be creative.?You only get one retirement.

Once the objective is stated, the data must be collected.?In sailing this includes getting the weather reports, the tide and current information, wind and water conditions, amount of daylight, the navigational aids that will be used and their characteristics, the amenities available at the ports, the notice to mariners that the USCG publishes advising of special situations, an assessment of the boat, the supplies that are available to include food, water, fuel, and repairable, an assessment of the crew that is sailing with you, and your health.?This is the same for financial planning as I collect information such as tax returns, bank statements, investment reports, estate planning documents, insurance papers, payroll statements, employee benefit statements, social security information, pensions and real estate investment information, potential inheritances, near term major purchases, college funding issues, risk tolerance for you and your spouse, experience with investing, and many other items that can take up the rest of this demonstration.??

I then assimilate the information.?I then must determine a strategy to accomplish the objective.?For sailing, I may want to adjust my track and speed so I can make it to the marina by a certain time.?I may need to plan for a contingency if a storm blows in.?Maybe an area that was navigable before is no longer due to fluctuating water levels and therefore the track must be adjusted.?Maybe I find out the sailboat needs repair on a certain piece of equipment, and I do not have the capability yet to procure that so again I must adjust.?Thus, in financial planning I may discover that a person is over withholding and may have some additional funds that can be put to work to increase the investment growth.?Maybe the client is not properly diversified so I must design an appropriate portfolio.?Maybe the client can be better off opening a tax-free account for the future based on the amount of taxes they will be paying.?All these strategies evolve as I review the data.

I implement the strategies.?Why go through that whole exercise otherwise.?Unfortunately, a good idea sometimes never comes to fruition if the person is procrastinating and is afraid to take that step.?It is important to note you can never have all the information.?Some information is better than no information.?Waiting for all the information may have you lose the opportunity.

D-Day comes, and I get underway.?The plan is only as it was good at that instant I created it but the conditions usually immediately change.?The weather did not go as planned.?I drop a winch handle overboard.?A sail gets torn.?A crewmember gets seasick. A big freighter is coming down the channel.?I must adapt and overcome.?This is the same again with financial planning.?I will meet the client and find out a relative died unexpectantly and that there was an inheritance.?Or a client may have cancer.?A client came across a nice winter home in Florida and wants to move down there.?A client had a child move back home with them.?All of these were unplanned but must be dealt with.?It is part of life.

Finally, the sailing trip ends with reaching the destination.?Whether it is crossing a finish line for a sailboat race or ending a 5-day sailing cruise, the sense of accomplishment is felt.?Sometimes there is celebration.?An accomplishment of a big goal should be celebrated.?However, this may be short lived as a process must be taken to include to analyze how your journey went and determine if there is anything different you could have done.?Is there a new goal you can set??In financial planning I get many clients who reach retirement.?Some are surprised when they get there because they had an impression it would be different than what they thought.?Maybe they get bored and miss the comradery of the work life.?Maybe they have more money than they need and want to help their struggling family members.?Maybe they want to start a business out of a hobby they enjoyed.?It is important to note that financial planning, like sailing, is an ongoing process and never ends.”

I concluded the BNI presentation and had the audience interested in sailing – and hopefully an appreciation of what I do professionally as a financial advisor.?Mission accomplished.

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Richard A Balch, CFP, CLU, RICP

Woodmen Financial Resources

1234 S Ridge Road

Green Bay, WI?54304

1-920-499-8833 Ext 110

[email protected]