Howdy!
Last week I wrote about devils, levels, and the idea of enough.
Today I’d like to continue that thought but in a different context.
Yes, you should absolutely consider your personal definition of enough when it comes to your money, your lifestyle, and everything in between. I haven’t changed my mind on this.
But today, I’d also encourage you to consider how much is enough when it comes to your financial planning.
Hear me out…
With the abysmal state of the average American’s retirement preparedness, you’re probably thinking the last thing to consider is enough.
Based on the headlines, it seems like a triple-scoop of more is called for, doesn’t it?
But some of you reading this are probably thinking to yourself something along the lines of:
Am I going to be OK?
Am I doing enough?
What am I missing?
I really wonder what my ____________ (friends, family, co-workers) know about retirement planning that I don’t?
Ultimately, I think we all want to know we’re going to be OK, regardless of how you define “OK” for yourself.
But I'd like to caution you against this idea that you can or should always be doing more when it comes to your financial and retirement planning.
If only I invested in investment XYZ or refinanced my mortgage to save another 0.125% interest on my loan…
If only I had the perfect personal finance app or tweaked my spreadsheet just so, things would start to fall into place.
Sound familiar?
This is just another flavor of different level, different devil.
But I’d like to offer a simple solution.
Ready?
Here it is…
Good is great!
Yep, that’s right.
You don’t need a “perfect” plan, you just need a plan. Your plan.
You don’t need a perfect portfolio…
You don’t need a perfect budget…
They don’t even exist.
Rather, get comfortable with the idea of good enough when it comes to your planning and retirement prep.
Personally, I’d rather see you have a plan that’s good - and that you’ll actually implement and stick with - versus an optimized, near-perfect, checks-all-the-boxes plan that never gets put into action because you (or your advisor) are too caught up trying to get things “just right.”
Don’t let perfection get in the way of progress here.
Regardless of how well-designed and finely tuned your plan is, it probably won’t matter tomorrow or next week or next month.
Because life happens.
And no matter how well-thought-out your assumptions and models are, they’re wrong. We still can’t see the future, ya know?
In fact, the more detailed and optimized your plan is, the more fragile it is.
It’s more brittle. More susceptible to life’s surprises.
Let me suggest another approach.
As quickly as you can - with the help of a financial advisor or on your own - get to a plan or model with YOUR information in it.
Then, accept the fact that your plan is wrong.
Don’t get too invested in the plan.
Instead, get your arms (and your mind) around the idea of ongoing planning.
Embrace change. Embrace life’s surprises. Embrace the fact that your plan/model is simply a collection of guesses.
And then, as you get more information and feedback from living your life, update your plan accordingly.
That’s what I do. And it’s what I encourage you to do too.
Remember, in this context… perfect is bad.
It’s fragile.
Brittle.
It’s a fiction.
But a good enough plan is great!
Think practical over optimal.
And this type of plan will get better and better over time as you adjust and refine it to better reflect where you’re going and the life you want to live.
Because it’s designed from the outset to be changed and updated as you learn and adjust to life.
It’s planning instead of just having a plan.
What do you think?
Links & Things
You might be interested in my latest blog post:
With inflation on the rise and uncertainty ever-present, I took the opportunity in my latest podcast episode to share my thoughts on:
Thank you, as always, for reading.
And if you have any questions or an idea for a future newsletter, podcast, or blog post topic, I'd love your input.
Just hit reply - I read (and appreciate) every email you send.
Until next Wednesday,
Russ