Most of us had the experience as children of climbing high into a tree only to realize we were not quite sure how to get down. For the lucky ones, our parents were around to help extract us for our precarious situation. For the unlucky ones, you either had the opportunity to get to know your local fireman or ended up with a cast on your arm. Kittens seem to have the same difficulty.
I have been reading a book by Ed Viesturs in which he recounts his story of becoming the first American, and only the 6th person in history, to climb the 14 highest mountains in the world. While his story is fascinating and awe-inspiring, his motto for success really stuck home….
Reaching the summit is optional, getting down is mandatory!
Ed talks about how often he turned around before reaching the top of the mountain. Sometimes when he could see it just up ahead. The reason for this was due to the fact that based on predetermined rules and principles, reaching the summit would require him to take unacceptable risk. It is interesting to hear how he turns back even when others he is climbing with push on to the summit.
I began to think how much this is like financial planning. We all have different levels of acceptable risk. We all want to reach the summit one day. And we all need a plan for getting back down.
I have met with many people over the years who have done a fantastic job of getting up the financial mountain through diligent saving and prudent investing, but interestingly, they have not given much thought to how they are going to successfully navigate the second half of their investment journey.
Once you leave employment and no longer receive a steady paycheck, the rules of the game change dramatically. It is at that point, when you are at the summit of your financial planning journey, that it is imperative you have a plan for getting back down the other side of the mountain.
I would argue this 2nd half planning is far more important than the planning it takes to accumulate and invest money while working. If you have not considered this fact, I would encourage you to begin to explore how you are going to handle things after you have summited your financial mountain.
If you would like to get a different perspective on your current portfolio or investment plan, feel free to contact us at firstname.lastname@example.org and we can setup a time to visit over a cup of coffee.