We do too much long term planning

Financial advisors on average spend too much time on long-term plans. General Dwight Eisenhower said, "Plans are useless, but planning is invaluable." And too many of us spend too much time on those long-term plans, and sometimes miss planning opportunities in the meantime. Consider someone who's coming up on 70 years old and getting ready to retire. Now let's picture that person as a 35-year-old, sitting down with their financial advisor, and many advisors would say, "What do you envision for your retirement?" Now let's think about when that was, 35 years ago, it was 1985.

The telephone was something that was bolted to the wall. We didn't have personal computers. It was still going to be seven years before it was possible to surf what would become known as the worldwide web. How much else has changed in the world, now more to the point, how much has changed in that person's life? Has her career taken her to a new city? Does she have kids? Does she have grandkids? Where do they live? Well, could she possibly have imagined all of that when she was 35? Probably not.

Long-term plans, detailed step-by-step, are really of very little value, but here's my point. Long-term goals can be valuable, but detailed plans are for near-term goals. When something is within five years or so, it makes sense to break it down, step by step and figure out what you need to do to be able to accomplish that. By all means draft a detailed plan, if you want to buy a new house or buy a new car or buy a vacation property, or do something significant in that timeframe. But for long-term planning, the focus needs to be on habits and opportunities that you can take today and protecting against the risks that might happen In the meantime.

When you sit down to review your finances, take a look backward rather than taking a look forward. Did last year go the way you anticipated it would? Did you put away the percentage of your income that you had intended or that would help provide for that longterm success? Did your expenses come in pretty much the way you thought or were there unexpected things that happened in the meantime? What new opportunities can you find now, what are the decisions? How would what happened over the past year inform the decisions you make for the coming year? Are you optimizing today?

Optimize today is the key, because if you optimize today on a regular basis, then you'll pave the way for a good long-term outcome. If you want to get a checklist on whether or not you are optimizing today, you can go to the web address that's right here on the screen. You're welcome to get your free checklist on how you can optimize today and make sure that when you spend time planning, it's spent on the most productive things.