UNCERTAIN EVENTS AND THE FUTURE

For many of my clients (and for me), uncertainty is one of the most frustrating aspects of the current economic and financial environment.

Planning for retirement and other goals has become much more difficult and a little insight about the future sure would be welcome.

The truth is, we can’t know the future. With the exception of certain undeniable forecasts, like the one about death and taxes, I cannot tell you what will happen later today, let alone what the future holds. No one can.

Yet, to some degree, we long for a little sense of certainty to help us make plans, which may be why it’s so easy to make assumptions about the future based on the past.

To deal with this frustration, we can plan for the future.

The planning we do is based on what we know about life, and especially, what we know about the financial world in which we live.

WHAT CAN’T YOU KNOW?

You can’t know when your life or that of a family member will be significantly changed.

You can’t know what’s going to happen with the overall economy.

You can’t know what’s going to happen in the real estate market or the stock market.

You can’t know when your employment will be disrupted.

THREE KEY POINTS:

You must save money.

Invest in a variety of financial instruments.

Use insurance to transfer some of the risks of uncertainty to someone else.

Recognise that life will have difficult times as well as good times… and plan for both.

Planning for the good times seems easy – the economy is strong, the financial markets are in full bull mode, you are healthy, and life is good.

Planning for difficult times is, well, difficult, but doing so is even more important than planning for the good times.

Considering these things will help you and your family weather the difficulties life may present.