Keeping it Between the Lines

We’ve built dozens of what we call “Prosperity Plans” over the years.  If you haven’t worked with us before, its what we call a financial plan…but it’s a little different than what you might have experienced elsewhere.  It’s meant to be a guide and a decision-making model…not something that is etched in stone.  Speaking from experience, few plans turn out exactly as they are initially built.  Hey, life happens!

Depending on your age and when you build your plan it might cover the next 50+ years…even 70-year-olds out there have a plan expanding beyond 20.  What’s nice about relatively long planning periods, is we can talk about your goals and expenses in “ballpark” figures and use those numbers as your guide…not as gospel.  If you’ve identified it takes about $10,000 a year to do the traveling you want to do, the way you want to do it…that’s your guide.  You might only spend $8,000 one year, or perhaps the next its closer to $12,000.  These aren’t things to be concerned about, but they are things to be aware of from year to year.  As you recognize patterns you might adjust your goal either up or down.  Making this adjustment might require nothing further, but this could be an opportunity to free up resources for a different goal or a course change requiring some consideration of the resources going to another goal that might now seem less important.

It's one thing to fine tune and shift your priorities as you live your plan, essentially staying between the lines.  Perhaps you’re not meeting every goal perfectly, but you also aren’t careening off the road.  Where the concern lies is when your GPS is telling you to make a turn to avoid the “Bridge Out Ahead”, but you just keep on going straight.  Sometimes we see this happen when one particular goal within your Prosperity Plan is consistently outside the lines and by large amounts.  It’s easy to say, “Oh, well I had this happen.” Or “That was just a one-time expense.”.  While that is often the case, if there are recurring “one-time” expenses it may be that a permanent adjustment is needed to accommodate for whatever they may be.  Unfortunately, if it’s a fairly large amount, it will likely mean an adjustment elsewhere in your plan.  Sometimes these are hard decisions, but they do help you get to the heart of what is really important to you.  If your home is starting to be a money pit and travel is your passion perhaps it’s time to reshuffle your priorities and shuffle yourself into something lower maintenance.  In a sense you’re going into “Set it and forget it” mode and leaving yourself with more money for fun and less for your handyman.  While we would love to create excess income or excess investment returns when we need them, that isn’t usually reality.  We are investment managers and financial coaches, not miracle workers.

Speaking of investments, one key thing to remember about long-term financial planning is that there will be years when you do have excess investment returns, sometimes well above the norm. (2019 – 2021 was one such stretch).  Sometimes the urge may be to spend some of this excess and enjoy it.  While it may be okay to give yourself a little breathing room, it’s important to remember that your Prosperity Plan has factored this into its success model.  Banking those excess returns are what makes weathering the storm easier in years when things don’t look near as good.  2022 anyone?  We want people to enjoy their wealth and use it to provide smiles for them and those most important to them, but we can’t look at excess returns as something to spend the way we might look at a particularly good night in Vegas.  Your Prosperity Plan isn’t dependent on a good night at the tables, but your long-term financial success is dependent on those excess returns in your account to help you through times that aren’t so fun.

Well folks, that’s a wrap for today.  The most important thing to remember is that your Prosperity Plan is meant to be a guide and its not only allowed to change as you do, it should change as you do.  Some key things to remember:

  1. Watching every penny isn’t fun and its usually not useful. 

  2. Making small adjustments so your goals better reflect your reality can be empowering and ensure you are using your hard-earned resources in a way that maximizes the smile on your face.

  3. Making the necessary large adjustments when consistently overspending in certain areas of your life can be tough, but are absolutely essential for the long-term health of your finances.

For those of you working with us, feel free to reach out when you have questions or concerns.  We know life changes and adjustments will always have to be made.  If you are wondering what this thing called a “Prosperity Plan” is, please reach out to us as well to learn more about the method to our madness and why we love the work that we do.