Proactive Financial Planning – Part 2
Putting Plans into Action
In working with clients over the past twenty plus years, I’ve had initial meetings where someone will say, “I had a plan done years ago,” and they drop a large notebook on my desk. My initial thought is, ‘I hope you didn’t pay by the pound.’ Having a plan is important, but it doesn’t have to be overly complex and certainly doesn’t have to be four inches thick. The key is in the recommendations and then working on those recommendations to completion. If asked, many attorneys will tell you that one of the biggest tragedies is a client paying for a great estate plan, but then skimping on paying the attorney to ensure that assets are titled correctly. The client has the best intentions of doing this themselves, but then life gets in the way and their assets are never retitled. The plan is worthless.
Lights. Camera. Action!
The lights and camera are static elements of a movie being filmed and is much like a financial plan that has been completed. It’s not until the Director, shouts “Action!” that anything really happens. Until you put action into your financial plan, there can be no results.
An example of putting plans into action is when I came up with a dating plan for my daughters. (see Part 1 – “Proactive Financial Planning” if you missed how I interviewed the boys who wanted to date my daughters). I came up with a plan and thought I was done. My reasoning was, ‘These boys will listen to a semi-threatening six-foot four father and follow my sage advice.’ But what happens when the young lad thinks he knows better and wants to test the old man? Much like a financial plan that requires implementation, my plan needed to be put into action.
There was one boy who passed the test after meeting with me and had been dating one of my daughters for a few months. As promised in our initial breakfast meeting, I was monitoring anything coming into our house from him. All seemed to be going well until my wife picked up a piece of paper off the floor that was a “love” letter from Allen to her. Two lines into his message it quickly went downhill, with him describing in detail some of his desires for greater ‘physical interaction.’ Only he used very descriptive terminology.
At that point I had a decision to make. Was my plan an idea or was I going to take action on it? If you know me well, you know the answer to this question. After talking with my wife, I walked over to my home printer to made three copies and then started highlighting the provocative parts. I think my wife’s mouth was still aghast when I told her I was headed to Allen’s house. In the car I made a call to Allen’s parents.
“Hello, this is Eric Reinhold, I’m on my way to your house. Is it okay if I stop by?”
“Uhh… yes. Is everything okay?”
“I’ll see you in a few minutes.”
I knocked at the door and his mother answered and invited me in. I handed a copy to Allen, his mother, and his father. Then I said, “Allen, why don’t you read this to your parents and tell me if it’s something you should be sending my daughter.”
The color completely drained from Allen’s face.
There was silence as they all looked at the highlighted paper.
Allen’s mother spoke first. Actually she yelled. “I did not raise a son like this!”
The moral of the story? Following through on a plan can entail more than you might first realize. No follow through = no plan. When you work with an advisor to input data and get projections to reach your goals, that plan is useless unless you act on the recommendations. If you don’t put your plan into action, then years from now you will still be in the same position or worse.
In case you’re wondering, the dating relationship ended that day.