The Right Model

Model of a city

There’s been a lot of talk of models lately.

As we begin to glimpse the other side of this CoVid-19 lockdown, everyone seems to reference this model or that model to illustrate the potential consequences of keeping the economy locked down or getting things opened back up.

Of infection from the virus.

Of mortality rates.

Of recovery rates.

Of the rest of your life…

Yes, that’s right. A model of the rest of your life.

And yes, you guessed it.

That’s what a financial plan is.

It’s a model – or best guess – of where we think things will go (or where we WANT them to go) from here based on what we know right now.

Something I know right now is that your model – your financial plan – will be wrong.

Seth Godin seems to agree.

But even if we agree that your financial planning model is wrong, the next question is whether it’s useful?

I recently wrote on Twitter that your financial plan isn’t a map; it’s a compass. You can read the rest here, if you’re interested.

So, what makes your financial plan – your model, if you will – useful?

Well, I think its highest utility comes when you think of it as a decision tool.

Something to help you evaluate decisions and trade-offs among those decisions.

A way to consider option A versus option B versus option C…

Something to help you make more informed choices among the things within your control.

And which serves as a regular reminder of the things that aren’t in your control.

But it only become useful if… you USE it.

That means regularly “looking up” to use my Twitter compass analogy above, and assessing where you are, what’s changed, what hasn’t changed, and moving forward from there.

Sorry for playing like a broken record.

I’ve said all this before, and I’ll eventually say it alll again.

Likely many more times.

But I think there’s a sense of empowerment that comes from first admitting “we don’t know” and then making a plan – again, just a model – and going forward.

One step at a time.

Hope you’re doing well and feeling healthy.

If there’s anything you’d like to discuss, simply get in touch.

P.S. – Have some free time on your hands these days? Well, here’s an article about the 400+ Ivy League courses you can take online right now.

For free.

Thanks for reading. While you’re here, be sure to sign up for my weekly email newsletter where I share tips, advice, and stories about the intersection of money and our lives. Just click here to join the community.

Russ Thornton
Russ Thornton
Hi there! I'm Russ, and I help women in their 50s and 60s achieve and maintain their desired lifestyle leading up to and throughout their retirement years. Imagine being able to look forward to a comfortable and confident financial future...
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