“I know you don’t have a crystal ball, but…” is a prelude we hear frequently.
It’s true. We don’t have a crystal ball. Our jobs would be a lot easier if we did. Illuminating the “right path” to help you build a fulfilling life would be a matter of looking into our crystal ball to find out:
- The impact of current policy on economic growth prospects domestically and abroad;
- The future returns in each individual asset class and fund over various time periods;
- Your actual date of death;
- What level of health you will enjoy in your years before death;
- And much, much more.
With such information, we would be able to draw a map as clear as an amusement park’s that would allow you to traverse through your years enjoying the sights and sounds, stopping at first aid as needed without a thought to cost, and eating funnel cakes to your hearts’ content.
Alas, we have yet to find the crystal ball that gives us such a flawless depiction of the future that we can eliminate all uncertainty for you.
While we wait for the crystal ball to grow, what can we do?
- Get really clear on where you are now.
What assets and liabilities comprise your current financial landscape? What are your actual incomes and expenses, and how are those likely or able to change if necessary?
- Get a sense of what you would like your life to look like in the future.
What parts of your life are working for you, and what parts would you rather change? What brings you fulfillment? What do you value above all else? What are your desires?
- Frame your desired future into achievable goals.
Given what we know about where you are and where you would like to be, what are reasonable outcomes that you could pursue?
- Understand what is controllable and what is not.
We cannot control world events, economic downturns, or health emergencies. But we can control portfolio allocation, our response to volatility, and what we are doing to stay well.
- Be mindful of various risks and approaches for mitigation.
Your outcomes will almost certainly differ from our projections. Appropriate risk management, including insurance, diversification, and living your plan, may help to limit downside risk.
One way to handle the anxiety that comes with uncertainty about the future is to get grounded in certainty. An accurate prediction of the future through a crystal ball is one (impossible) way to find clarity. The suggestions above offer a more attainable approach to melting the fears that comes with uncertainty.