When you think of a memory, whether good or bad, what comes to mind? For many people, the most vivid and influential memories are recent ones. When I think about a memory, what comes to mind is the headlining news over the last year; I still remember how I felt about them at that time. Thinking back, I am astounded at how many times someone said how bad something was, how it was going to wreck the stock market or the country, for it to only become a footnote in history.
The explosion of news and media on cell phones, tablets and desktops this past decade has made it impossible not to live in a world of hyperbole news stories that wind up getting over sensationalized. At the same time, the proliferation of social media tools has made communicating news and information instantaneous. In this modern, technology-driven world, making rational decisions have become difficult, as we are constantly challenged with filtering all of the news and information.
Financial planning is an on-going process of setting a course of action and then constantly making small adjustments along the way to counteract events that could not be anticipated. The unexpected events could be something minor, like a temporary reduction in income or unforeseen expenses arising, to the more serious and impactful, such as a big drop in the stock market or an unexpected death. These are all things that can be planned; however, our irrational reactions to current events results in decisions that are often regretted later on. One common regret is dropping out of the market due to the news outlets over sensationalizing the facts. Our processes filter this information and help us make proper decisions. Using processes to drive decision making reduces emotional biases that have a tendency to cause people to deviate from a course of action at seemingly the worst time.
We cannot control what is going on in the world, the stock market, or even our day-to-day lives it seems, but we can control how we react to it; plan for the worst and hope for the best. That is the root of how we begin our financial planning process and how we assess every situation. We try to examine everything that can go wrong before thinking about what could go right. We do not live in a perfect world – far from it. Maybe it’s being a bit Pollyanna, but I am hopeful that things will never be as bad as they seem when they occur. But if they are, our financial planning process will help guide us through it.
Contact us if you would like to discuss how our financial process can help you.
