Financial Lessons from a Swim Meet
Last year, when my wife and I took our three boys to a swim meet in Ocala our middle son, Canon, had set high goals for himself—he aimed to win the entire meet. For those unfamiliar with swim meets, it's a point-based system. The number of points you earn are added together for a cumulative total across all the events you participate in. You don't necessarily have to win every event; you just need the highest point total across all events.
Canon was poised to succeed, but as he approached his last event, the hundred-meter breaststroke, things didn't quite go as planned. He was distracted at the starting blocks and didn't notice when the other swimmers were called to get ready. In the confusion, he was the last to jump in the water, and ended up finishing last in his event. Cannon's dreams of winning the swim meet quickly faded away.
Reflecting on the event, I realized Canon wanted to win but didn't have a solid plan. He lost focus at a crucial moment, much like how some of us approach financial planning.
When it comes to financial planning, it's essential to have a solid plan for achieving your goals and the requisite discipline to stay the course. Planning strategically involves managing risks that could prevent you from achieving your goals.
In retirement planning, for example, three major risks include: longevity, market, and spending shocks.
- Longevity risk involves planning for how long your retirement will last and ensuring your wealth can support you throughout.
- Market risks relate to the performance of the markets and their impact on your wealth during retirement.
- Spending shocks are the unexpected expenses that exceed our planned retirement budgets, such as long-term care and major health expenses.
This is why we advocate for strategic financial planning—it helps you develop strategies and take necessary actions to achieve your goals. When it comes to retirement planning, unlike Canon's swim meet, where he'll likely get another chance to win, retirees only get one shot at a successful retirement.
If you have questions about your financial or retirement planning, don't hesitate to reach out. Or if you know someone who could use some advice in these areas, please share this blog with them. We look forward to hearing from you soon.