The power of planning....

[armor99]

So it occurs to me that now being much closer to the end of my career, than the beginning. I might want to try to give back to some of the people just starting out. Obviously we all wish we could go back in time and say “What do you think you are doing??!!”, to our younger selves, but I figure this is the next best thing.

I believe the number one predictor of being able to retire early (in theory why we are all on this forum), is not luck, or skill, but actually careful, well thought out planning. Planning that went on for not days or months, but years.

Step 1. Start investing as young as you can. The power of compound interest needs decades to work, it cannot be shortcut. You have to put in early and often AND NEVER MISS A CONTRIBUTION.... ever....

Step 2. Consider the typical salary range of the profession you choose. Never pick a field you hate just for a large salary. But also understand if your passion career tops out at 30k, then you will probably not be able to retire early.

Step 3. Consider carefully how the choices you make today, might shape your life years down the road. Are you ok spending 50k on your dream car today, if it means having to work 5 years longer at some point? Life has trade offs. Pick ones that you can live with.

Step 4: Fate is comming to find you in a negative way. At some point financially or otherwise something negative will happen. Plan for that occurrence! When times are good, put some away. Remember that fate is comming to kick your butt. The best you can do is pad your butt between kickings. I learned that lesson early. I was laid off at 25. One of the darkest times in my life.

Step 5. If Eeyore is your spirit animal, you are doing something very wrong. Try to remain positive, and upbeat when possible. No one wants to deal with people that are perpetually negative in their outlook. Over the years many good things have come my way just by remembering things like “please, thanks, I really appreciate what you did” It sounds cliche but so few do it anymore it is almost like a superpower..

 

[travelover]

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[Gumby]

A brilliant distillation of the famous German general, Helmuth von Moltke the Elder:

"The tactical result of an engagement forms the base for new strategic decisions because victory or defeat in a battle changes the situation to such a degree that no human acumen is able to see beyond the first battle. In this sense one should understand Napoleon's saying: 'I have never had a plan of operations.' Therefore no plan of operations extends with any certainty beyond the first contact with the main hostile force."

One might also take heed of another famous general - Dwight D. Eisenhower --who said

"Plans are worthless, but planning is everything."

 

[Animorph]

I was pretty clueless about how to plan when I started working. I put enough into a 401k, when it became available, to get the company match, but that was about it for the first 10 years. Being in the transition years from defined benefit to defined contribution plans didn't help, but did push me in the end to become more knowledgeable about retirement.

Just the simple strategy of save 15% of gross salary would have been very helpful. That's always been my baseline advice. In the absence of that through much of my career, the luck of stock options gave me a needed jump start.

 

[armor99]

A brilliant distillation of the famous German general, Helmuth von Moltke the Elder:

"The tactical result of an engagement forms the base for new strategic decisions because victory or defeat in a battle changes the situation to such a degree that no human acumen is able to see beyond the first battle. In this sense one should understand Napoleon's saying: 'I have never had a plan of operations.' Therefore no plan of operations extends with any certainty beyond the first contact with the main hostile force."

One might also take heed of another famous general - Dwight D. Eisenhower --who said

"Plans are worthless, but planning is everything."

I will counter with Sun Tzu.... “every battle is won or lost before it is ever fought.... “[emoji3]

 

[Gumby]

I've been thinking about Mike Tyson. Back when I was at USNA, they made us box for two years. I'll admit that at the time I wondered why I should have to do that; I was going to be a submariner, not anyone who would ever engage in hand to hand combat with the enemy. But, looking back, it was a way to impart lessons that we would never forget, some of which turned out to be useful to me not only in the military but also in my subsequent legal career and on my FIRE journey. Here are some:

1. First, as a corollary to Tyson, the whole time you're thinking about how you're going to jab here and cross there and end up laying him out, he's thinking about how he's going to do the exact same thing to you. So you need to learn the art of anticipating your opponent's plans as well as adapting your own to changing circumstances. In investing, you need to be aware that circumstances change and your investments should change accordingly.

2. If you're not willing to be punched square in the face as hard as a person can hit you, don't even step in the ring. In other words, be certain that the game is worth the candle, and don't engage in disputes with people unless you're willing to see it through, because there may very well be nowhere to run when it goes south. In investing, you should always figure out what the worst possible outcome will be and prepare yourself to face it, or don't invest in the first place.

3. You will be knocked to the canvas, probably more than once. It happens no matter how good you are (or think you are). The more important thing is that you absolutely must stand back up and get back into the fight. You may still lose, but you certainly will lose if you just lay there.

 

[2017ish]

I've been thinking about Mike Tyson. Back when I was at USNA, they made us box for two years. I'll admit that at the time I wondered why I should have to do that; I was going to be a submariner, not anyone who would ever engage in hand to hand combat with the enemy. But, looking back, it was a way to impart lessons that we would never forget, some of which turned out to be useful to me not only in the military but in my subsequent legal career and on my FIRE journey. Here are some:

....

Nice. I like this analysis (particularly the three points I omitted for readability/space).

 

[ckelly78z]

A fine sentiment, but how do you present it convincingly to young associates who have their eye on that new BMW. These young folks have always had everything they ever wanted, and grew up with a smart phone in their hand...it's hard to relate to them at our age !

 

[armor99]

A fine sentiment, but how do you present it convincingly to young associates who have their eye on that new BMW. These young folks have always had everything they ever wanted, and grew up with a smart phone in their hand...it's hard to relate to them at our age !

Some will listen to warnings from people that have “been there, done that”. Others will choose to ignore advice to their own detriment.
You cannot really motivate people. The best you can do is show them the way, and hope they follow. The secret to becoming wealthy is that it is no secret. It involves saving, tenacity, and time... and there is “no app for that”, it just takes time... [emoji3][emoji106]

 

[newtoseattle]

t shirt?

"if eeyore is your spirit animal you are doing something very wrong"

This is a wonderful quote - can someone make a t-shirt?

 

[YVRRocketSurgery]

It's been said that the plan itself is less important than ongoing planning since one situation in life is constantly evolving. I'm a big believer in regular status checks and course corrections.

I'm also a big believer in balancing the enjoyment of the now while also saving for the future. You obviously don't want to regret wasting your youth. But unfortunately, sometimes it takes a while to know yourself and understand the best way to maximize your limited dollars.

 

[Retire52]

Armor99,

great statement, "The secret to becoming wealthy is that it is no secret. It involves saving, tenacity, and time"

I think the planning is critical to FIRE and maybe so is it's precursor, the desire that led to you wanting to sit down and draw up the plan in the first place. a lot of discussions with the other guys falls in deaf ears I feel because they lack that desire.

 

[DrRoy]

"Plans are worthless, but planning is everything."

I always thought that one was Churchill, but I looked it up and it's Dwight D. Eisenhower.

 

[SnowballCamper]

Quote from another thread in "Young Dreamers" forum, "Hi all, I'm a 30 year old male and I'm struggling with formulating a long term plan other than just being a natural saver. I don't know if I will ever get married, and I do not know if I will ever have kids. How do you plan for spending a couple decades out when there are such major unknowns in your future life? "

So yes, plans are worthless. It's not that planning tells you what you are going to do, but that the process forces you to think about what you would and could do.

I'd say the power isn't in planning (because it can lead to planning paralysis as in the quote above), but in thinking about what to do in different future situations. Thinking and a little research gives you knowledge of your options and how they relate to possible outcomes, then make decisions in accordance with your goals...and be patient.

 

[brett]

Looking in the rear view mirror I would say that from a financial perspective it is fairly easy to tell who will have a secure financial retirement and who will not.

How...simply by how they live their day to day life. Their decisions around material items and consumer credit. How ambitious they are when it comes to post secondary educations, life long learning, accepting challenges, etc. Who they socialize with. In general...how they move forward with their lives.

Certainly some do 'wake up' but not many in my experience. I look back at my many nieces and nephews over the years. Very easy to see who was going to be successful vs who just let life happen, stumbled along until it was too late.

Guess what...their parents were the same.

 

[armor99]

Looking in the rear view mirror I would say that from a financial perspective it is fairly easy to tell who will have a secure financial retirement and who will not.

How...simply by how they live their day to day life. Their decisions around material items and consumer credit. How ambitious they are when it comes to post secondary educations, life long learning, accepting challenges, etc. Who they socialize with. In general...how they move forward with their lives.

Certainly some do 'wake up' but not many in my experience. I look back at my many nieces and nephews over the years. Very easy to see who was going to be successful vs who just let life happen, stumbled along until it was too late.

Guess what...their parents were the same.

Well said.... the goal is to “happen to life”, rather then letting “life happen to you”.

 

[steiny]

So it occurs to me that now being much closer to the end of my career, than the beginning. I might want to try to give back to some of the people just starting out. Obviously we all wish we could go back in time and say “What do you think you are doing??!!”, to our younger selves, but I figure this is the next best thing.

I believe the number one predictor of being able to retire early (in theory why we are all on this forum), is not luck, or skill, but actually careful, well thought out planning. Planning that went on for not days or months, but years.

Step 1. Start investing as young as you can. The power of compound interest needs decades to work, it cannot be shortcut. You have to put in early and often AND NEVER MISS A CONTRIBUTION.... ever....

Step 2. Consider the typical salary range of the profession you choose. Never pick a field you hate just for a large salary. But also understand if your passion career tops out at 30k, then you will probably not be able to retire early.

Step 3. Consider carefully how the choices you make today, might shape your life years down the road. Are you ok spending 50k on your dream car today, if it means having to work 5 years longer at some point? Life has trade offs. Pick ones that you can live with.

Step 4: Fate is comming to find you in a negative way. At some point financially or otherwise something negative will happen. Plan for that occurrence! When times are good, put some away. Remember that fate is comming to kick your butt. The best you can do is pad your butt between kickings. I learned that lesson early. I was laid off at 25. One of the darkest times in my life.

Step 5. If Eeyore is your spirit animal, you are doing something very wrong. Try to remain positive, and upbeat when possible. No one wants to deal with people that are perpetually negative in their outlook. Over the years many good things have come my way just by remembering things like “please, thanks, I really appreciate what you did” It sounds cliche but so few do it anymore it is almost like a superpower..

Great post

A lot of what you said is why I try to help the next generation

We need to educate the young . I wish I had someone help me when I started out.

 

[bolt]

To add to the great insights already listed above.
You can plan, but extreme risks are out there.
I consider Morgan Housal's insights a concise read on risks exhibited in this link:

https://www.collaborativefund.com/blog/nobody-planned-this-nobody-expected-it/

Mentioned:
Out of 104 tanks in the unit, fewer than 20 were operable. Engineers quickly found the issue, which, if I didn’t read this in a reputable history book, would defy belief. Historian William Craig writes: “During the weeks of inactivity behind the front lines, field mice had nested inside the vehicles and eaten away insulation covering the electrical systems.”

Good luck & best wishes......

 

[bada bing]

I passively tried to impart a little experience for younger work peers, but to be honest, it doesn't get received and acted on very often. I worked in a more and more uncommon bubble - blue collar work that stills pays well and has good benefits. My general tact was observing that $100K a year is a good budget that any spouse (almost exclusively wives) should be on board with living within. Bank the rest and retire early. None of the younger guys had any luck (or the will themselves) to delay gratification and cut down to that level. If the industry situation holds for another 20-30 years, they'll be fine. I personally wouldn't bet on their bubble lasting that long though.

 

[Lewis Clark]

To add to the great insights already listed above.
You can plan, but extreme risks are out there.
I consider Morgan Housal's insights a concise read on risks exhibited in this link:

https://www.collaborativefund.com/blog/nobody-planned-this-nobody-expected-it/

Very interesting article. Thank you for sharing!

 

[athena53]

I retired abruptly at age 61 when my BS bucket was full. I quit on a Monday, walked out for the last time that Friday. I pulled a couple of my brighter associates aside, one in her late 30s and one in her late 20s and told them I was leaving. I also told them to save, save, save so they would have this option if they needed or wanted it. They're pretty smart ladies so I suspect they're taking my advice.