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The Things We CAN Control Thumbnail

The Things We CAN Control

One month into life with Baby #3, it is clear that I have lost all control of what goes on in my house.  I know, I know, like I ever had any to begin with…  Going from two kids to three triggers the same observation from everyone.  “Hey, you’re switching from man to zone.”  With three boys five and under, we are in straight up prevent D.  We’re just trying to keep the play in front of us and make sure everyone stays alive.

We wake up every Saturday with a plan of how our weekend is going to go… and then a bunch of totally different stuff happens instead.  We do our best to be prepared for the unexpected.

Similarly, in the financial planning world, setting up the plan is usually the easy part.  Putting it into practice is where things get tough.  We can plan and forecast all day long, but the only thing we know for sure is that circumstances will change, and many of those changes are completely outside our control.

No doubt, it is natural to worry about some of the scary what-ifs.  After all, these aren’t just numbers on a spreadsheet – this is your livelihood we are talking about.  Given what is at stake, it is that much more important to stay focused on the things we can control and fade the noise.

Here are a few things many people tend to focus on – and the things they should be thinking about instead:

“What if the market crashes and I LOSE money?”

No one wants to lose money.  As an investor, you have to understand that if you want to generate returns, you have to take on risk.  If you find yourself worried that your account balance might go down, you probably shouldn’t be invested as aggressively as you are.

Many have snap reactions to short-term market events, trying to time the market.  This is a dangerous practice.  We would never try to guess when the baby is going to need a new diaper and only be prepared at those times.  We make sure that we are equipped to handle that situation at any given time since it is beyond our control.  By the way, I’ll take my wife’s accuracy in predicting the next diaper change over an economist predicting a recession any day.

You can control how much you are saving each month.  You can control your spending habits.  To an extent, you can control how much you earn.  Bull markets and bear markets are going to come and go.  Don’t let the fear of loss impact your retirement picture.


“The Federal deficit is growing which could lead to inflation.  Social Security is broke.  Health care could be a huge cost down the road.  What if tax rates go back up?”

Now there is some scary stuff!  The good news is, for the most part we aren’t invested in the government – we are invested in corporations.  Focus on your portfolio in a different context.  While major economic conditions have influence on the earnings of the companies in which we are invested, remember that we are still living in the strongest capitalist society in the world.  Free markets will prevail as they always have in the past.

In terms of your financial plan – have you stress-tested for these events?  Did you factor in scenarios with excessive health care costs?  What is the impact to your retirement plan if tax rates go back up?  Have you done similar stress-testing with inflation and Social Security?

The bottom line once again is – we can’t control any of these things.  But we can PLAN for them.  A solid retirement plan takes all of these contingencies into consideration.  You certainly don’t want to live out your retirement desperate for the government to get its act together.


“What if I die prematurely?  What if I have a disability and can’t work?  What about long-term care?”

Ok, most people don’t ask these questions, which is one reason they need us.  So, what about those things?  These risks can be mitigated by careful planning.  You might have a sparkling retirement picture – unless one of these events occurs.  If that is the case it is even more logical to cover these risks.  Why leave these pitfalls in play if you can afford to fill them in? 

Adding in the cost of an insurance premium doesn’t typically have that much of an impact on the big picture.  Adding in a premature death or disability typically has a disastrous impact if not properly covered.  The best time to fix the roof is when the sun is shining so don’t wait until it is too late.


As Mike Tyson once put so eloquently, “Everyone has a plan until they get punched in the face.”  Sometimes you need to stick to the plan.  Sometimes you need to adapt.  Some things you need to take control of in advance.  My advice to you is something I heard a lot of growing up – keep your eye on the ball.