Turbulence, like trouble, usually arrives unexpected.
So I’m writing this blog 35,000 feet in the air on my way to Panama. The takeoff was effortless, didn’t feel a bump. Now I’m wondering if she’s a great pilot or whether the circumstances just perfect? I would imagine the answer to both questions is yes, granted, saying no to either doesn’t cultivate the right feelings at this very moment. But to the larger point, we require our pilots to practice. They need to experience failure in a safe environment because not every day is a perfect day, but every day requires a perfect landing.
But how do you simulate failure when you have enough? How do you pretend to experience the emotions of failure when the circumstance are not real? The challenge with financial failure is the event is unexpected. If you knew it was coming, you would avoid it. The duration is unclear, and the amount is unknown. Just like turbulence, you can’t predict it in advance. You can only use the skills you developed in the financial flight simulator (your financial plan) to manage it better.
Having too much money is like flying on a clear day. So why does every financial plan only show a projection of blue skies and upward motion? Have you ever seen a financial plan predicting a negative consequence? Of course not. They know we are eternal optimist and this makes us an easy target for the sale. Nobody likes to deal with negativity, but ignoring reality is dangerous.
My first question when I enter the financial planning flight simulator session with a new client is this: How big of a check could you write today? This begins the process of understanding your resilience in the face of failure because the ability to access resources quickly solves most problems. Fortunately when you ask the question in advance of the tragedy, it might change some behaviors that make it easier to handle unexpected turbulence.