The game that is financial planning Part 2
Last week, I have shared the first 5 ways on how financial planning can be like a game, and how these can be applied by learning from our favorite sports, like basketball or football.
Here are the rest of the lessons that, when applied, can make anyone a financial winner.
Have a coach. All teams have coaches. Even individual athletes – like boxers – have coaches. These coaches train them, prepare them, and give them instructions during the game itself. These coaches see the bigger picture, and they are experts themselves in the game. Most, if not all, have played one time or another, and so they have the skills, experience, and therefore the “eye” for winning the game.
In the same manner, having your own financial “coach” will be critical to help you reach your goal. These financial coaches should be experts in the field and can see not only the overall picture of your finances, but the nitty-gritty as well. They should give advice that is competent, objective, professional, and relevant in the different areas of personal finance such as cash flow, debt management, insurance, investment, retirement, and tax and estate.
Train and learn. The winning team and the winning athlete train hard every day. They learn new tactics, tricks, and strategies to improve the way they play the game and to better their chances of winning. As with one’s own finances, learning new investment strategies, expanding one’s knowledge on the various products and instruments available in the market, and learning and executing those knowledge will sharpen one’s financial skills and increase the chance of financial success.
Adapt with ‘what’s happening.’ The perfect plan only exists on paper. When the game starts, events may not go according to what was expected or foreseen: the opponent may have reacted differently or they may have adapted to your strategy.
Thus, what is happening in the game may entirely be different from the game plan. Nonetheless, this does not mean that plans are a waste of time. On the contrary, the best plans contain back-up and contingency plans, anticipating and preparing for different scenarios.
Most importantly, the people in the game – the coaches and players themselves – adapt to what is happening in the field. In the financial world also, things do not go as expected and perfectly as planned.
But being financially-ready for life’s unexpected turns such as death, disability, and financial emergencies will greatly ease anxieties and save money. This can be achieved by having the right insurance and proper level of emergency funds. Moreover, since markets move and events happen unpredictably, it is important that the investments in the portfolio contain instruments that best achieve the financial goals. It may also be that the financial goals themselves change and so the plan should be modified accordingly.
Have your own team. Games cannot be won by lone rangers. Even individual athletes have their own team behind them. For financial planning, a team of experts is best, pooling in the different expertise of professionals. Thus, one’s financial team may be composed of an accountant, a fund manager, a stock broker, a banker, a lawyer and a professional financial planner, all put and in harmony together to achieve the financial goal. When combined, all of these experts’ knowledge builds a comprehensive and airtight financial plan to achieve one’s goals. - Rappler.com
Rienzie is also an accredited investment fiduciary of Pennsylvania-based fi360 and an international member of the Financial Planning Association, the largest association of financial planners in the US. You may reach Rienzie at firstname.lastname@example.org, his Facebook account or Twitter @rbiolena.