Mike Tyson Would be a Financial Planning Genius
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Mike Tyson was famously quoted as saying, “Everyone has a plan until they get punched in the mouth.”
Naturally, many thought Tyson’s wisdom was limited to the boxing ring. Experts have now come to realize that Tyson was speaking more broadly, addressing the plight of the common man. In fact, getting “punched in the mouth” is a metaphor for any unforeseen hardship that has the potential to derail one’s intended outcome.
If Tyson were speaking to a group of investors, what he may have been saying is that everyone has a financial plan until life throws a “punch.”
The question is, “Which of life’s punches can truly derail a financial plan?” And moreover, “How should someone account for the uncertainty?” If every conceivable negative event is planned, your clients may think they have to scrimp and save every penny or plan to work until they die. Negative and depressing thoughts like those hinder the development of a thoughtful financial plan.
Let’s define the negative outcome to be avoided as “broadly outliving one’s resources.” It might be the realization that the financial end is nigh, causing draconian reductions in lifestyle, as opposed to the sudden acknowledgment that there is truly nothing left. Below I’ve identified (in no particular order) some common challenges and financial pitfalls that certainly have the potential to derail your clients’ financial plans.