Establish Desired Outcomes to Weather Financial Storms

Creating a long-term financial plan will help you weather future financial storms.
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By Rob Ziliak, CFP®

When it comes to the weather, our attentiveness is usually short term and myopic; we often fixate on this week’s forecast wherever we are located. Periodically, we may look at a slightly longer trend, such as how the hot, dry summer may impact the availability and price of fresh produce throughout the following winter. Even less frequently we may look decades into the future, when climatologists are forecasting dire outcomes for air, weather, water and food quality that threaten living conditions unless every country improves its environmental behaviors and policies now.

Rob Ziliak

Rob Ziliak, CFP

These considerations about the weather cover a broad spectrum, from what might only be a minor personal inconvenience today, all the way through the serious outcomes our actions may leave on the environment for generations to come. Unfortunately, our tendency is to focus more on the personal impact of the daily weather fluctuations we encounter rather than acting upon long-term and sustainable environmental solutions, even though failure to address the latter issue entails far greater consequences.

When it comes to your financial life plan, has your focus been short-term and myopic, leaving you vulnerable to unexpected financial storms? Or are you starting with long-term outcomes in mind that can be regularly assessed to determine how you are progressing and what adjustments you may need to make?

We have discovered that far too many investors make a series of isolated financial decisions during their early-stage years, and then discover decades later that their wealth curve did not grow sufficiently to meet their expectations. When you choose to delay saving for long-term goals, such as retirement or children’s college education, in favor of paying down debt first or leasing one of the most expensive cars in the neighborhood, you are rejecting the greatest gift an investor could want — time.

Compounding growth rewards those who pay themselves first, and it does so over many decades. That is why successfully navigating markets today requires an emphasis on prudent front-end saving and a customized, values-based investment strategy tailored to your individual career arc, expected income, and desired lifestyle in retirement. Warren Buffett, who not only is one of the wealthiest people in the world but also is considered by many among the most successful investors in history, expressed what he believes is the biggest mistake people make with money: “Well, I think the biggest mistake is not learning the habits of saving properly early. Because saving is a habit. And then, trying to get rich quick. It's pretty easy to get well-to-do slowly. But it's not easy to get rich quick.”

Financially successful people start their careers by asking, “Where should my money go relative to where it could go?” The person who pays herself or himself first will have the greatest probability of reaching their desired financial outcomes before running out of time, thanks to the growth in savings and investments over the course of a multi-decade career.

Time is of the essence when it comes to focusing on personal financial outcomes. Working through your financial behaviors and outcomes today can give you the ability to create a sunny financial forecast for the rest of your life, rather than forcing you to face a horizon forever darkened with threatening consequences.

About the author: Rob Ziliak, CFP®

Rob Ziliak, CFP®, is the chief experience officer at Buckingham Strategic Wealth, where his mandate to continuously improve the breadth and depth of resources available to help the firm’s clients achieve their most important financial life goals happily coincides with his passion for investor education.

Important Disclosure: The opinions expressed by featured authors are their own and may not accurately reflect those of the Buckingham Strategic Wealth®. This article is for general information only and is not intended to serve as specific financial, accounting or tax advice. IRN-20-1436