Last week, I sent you a chart of the weekly jobless claims at 3.3 million — dwarfing prior recessions. Yesterday, the latest week’s report doubled that at 6.6 million in new claims. I didn’t bother with updating the chart because prior recessions are so low compared to today that they are barely visible on the graph. What is important is that the sentiment surrounding our current health and economic crisis has shifted significantly in the last week, and I’m noticing the change in our client conversations.
Four weeks ago, clients weren’t calling. Two weeks ago, the conversations all centered around when is the right time to buy the market decline. This week, conversations centered on reduced income, furloughs, lost business, and pending retirement.
This is where the process of planning reveals its value. It would be easy to make a plan and then throw up our hands or try to defend the plan when things don’t go the way we hoped. But that’s not planning. Real planning is an ongoing process of assessing our situation, taking actions, resting (living life), and reassessing when things change.
It is this continuous process of planning, observing changes, and making adjustments that leads to a life lived with intention.
“The only thing that is constant is change.” – Heraclitus
But here’s what has changed in the process described above: The information that impacts our lives and financial decisions is changing much faster right now; so much so that it’s tough to wrap our heads around it. The process of planning — assess, take action, reassess — hasn’t changed, but the speed at which we repeat this cycle has increased significantly.
Every conversation I’m having repeats this process — clients share their current situation and what is changing, we discuss priorities and determine next steps, and then ask ourselves what things we need to keep an eye on for our next conversation.
To facilitate these conversations and to give you a written summary of the current plan of action, I am rolling out a new tool that has been on my mind to create for a long time — a one-page financial plan.
The long-form of the plan and the supporting data still exists — it’s this comprehensive picture of your total financial life that allows me to engage in constructive conversations every time we talk. The ONE-PAGE PLAN will become the succinct summary of our planning conversations, covering your current situation, the next actions to take, and the things that will lead us to reassess — giving you a custom roadmap to the things you can be doing right now to respond to the changes happening around us, and in your life directly.
I am greatly looking forward to our next conversation and writing your one-page plan — whatever the changes that prompt it.
There are many ways that our experiences with money impact how we see the world of our finances. And importantly, how we feel about our finances — particularly when confronted with a viewpoint that we simply cannot understand.
There are two ways to add fixed income to a portfolio: direct purchases of individual bonds, or the purchase of bond funds. We have a solid preference for owning individual bonds.
The savings that result from optimizing your income, tax, and wealth accumulation strategies serves to increase the margin of safety in your financial plan — creating a higher degree of confidence in a world where higher confidence is sometimes hard to come by.
