3 Strategies that are NOT Financial Plans

Due to this thing called COVID, many of our clients have had to re-assess their financial plans. Either their expenses are much lower, incomes may be higher, someone lost a job and had to rely on CERB to get by, or a combination of all.

Over the last 8 months of talking to clients, I have heard some interesting stories. Some made me happy, a few sad, but last week I had a meeting that confused me. They had a grand plan for how they are going to fund retirement.

What follows are 3 "strategies" I've heard over the years from clients describing Financial "Plans." (Bonus points if you can guess which strategy inspired this article).

I'LL SAVE MORE NEXT YEAR/ WHEN I'M OLDER/ WHEN I MAKE MORE MONEY/ AFTER THE KIDS LEAVE

No, you won't. Remember that deck that you were going to stain 3 years ago? It's still there. Unstained. Next year came and something else took your attention away. Money is like that too; if you don't give it a job NOW, it will get bored and wander off to something new and exciting.

There is a textbook case showing a person who is 25 investing $10,000 a year for 10 years compared to a 35-year old investing $10,000 a year for 30 years. Who has more at age 65? (the title kind of gives away the answer) That's the power of compound growth. The best time to start saving is yesterday!

WHEN MY PARENTS/RELATIVES PASS AWAY, THERE WILL BE AN INHERITANCE. I'LL BE FINE

Really? Your plan involves waiting for a loved one to no longer be with us? This might have been how money moved through generations a hundred years ago (Vanderbilt, Carnegie, Rockefeller) but not so much today. These tycoons all died in their early 80's. With today's advancements in healthcare, people are living well into their 90's. If I were waiting on an inheritance from my parents and they didn't pass until age 90, I'd be 63 years old. A little too close for comfort. And what's to say there is anything left?

I PLAY THE LOTTERY AND HAVE SEEN SOME PEOPLE MAKE MILLIONS. I HOPE I WIN ONE DAY

Hope is not planning. You can hope all you want but your chances of winning the lottery are abysmal. You are actually more likely to be killed by a falling coconut than winning the lottery. It's 100% accurate that "you can't win if you don't play", but marketing slogan aside, you have very little chance of winning if you DO play. (mind you, if you do win and find yourself in the Philippines, steer clear of the palm trees🌴🥥)

Kenneth Coombs CFP CHS RRC

Ken has worked in the financial services industry since 2005, is a Registered Retirement Consultant and a Certified Financial Planner. Ken has written financial planning columns and has been a guest in financial print, radio, and podcast programs.

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