“The art of living is more like wrestling than dancing, because an artful life requires being prepared to meet and withstand sudden and unexpected attacks.”
-Marcus Aurelius, Meditations, 7.61 as found in The Daily Stoic September 20th reading.
I used to work for an advisor whose favorite line was, “financial planning is an art, not a science”; I’ve always liked that quote, often reciting it myself. Until today, I’ve never thought to define what type of art financial planning would be considered. As I was reading the daily passage Ryan Holiday’s (@RyanHoliday) The Daily Stoic, it became obvious to me: financial planning is like wrestling. I can’t take credit for this analogy–that belongs to Marcus Aurelius. He’s the author of the quote under the Ultimate Warrior explaining how life requires us to be prepared to meet unexpected attacks, and just like life, a financial plan is constantly under attack.
Before we discuss where the attacks on a financial plan originate, allow me to expand on the comparison to wrestling with the help of Holiday,
“But anyone who has tried to do something difficult, where there is competition or adversity, knows that the dancing metaphor is insufficient. Nobody ever gets up on stage and tries to tackle a dancer. The dancer never gets choked out by a rival. For a wrestler, on the other hand, adversity and the unexpected are part and parcel of what they do. Their sport is a battle, just like life. They are fighting an opponent as well as their own limitations, emotions and training.”
Adversity. The unexpected. Fighting an opponent as well as their own limitations, emotions and training.
If you don’t immediately think about financial planning after reading those words again, well… you probably aren’t a financial advisor. But let me tell you, financial advisors see their clients wrestle with these obstacles all of the time. So, let’s take a look at these obstacles more closely.
- Turbulent markets
- High levels of debt
- Additional children
Personal limitations, emotions and training
- Financial illiteracy
- Behavioral Biases
- Lack of financial plan
These obstacles are precisely why financial advisors have jobs. When dealing with obstacles like these, the good and the bad, emotions tend to be elevated. Having an independent third party as a voice of reason can help prevent ill-advised decisions from being made.
If financial planning is like wrestling, then it makes sense to prepare for it like wrestlers prepare for their battles. Let’s take a look at how you can prepare to approach financial planning like a wrestler.
Disclaimer: I am not a wrestler, however, I played basketball through college–the preparation I am going to highlight below is similar for all athletes, but to keep with the analogy I will be using examples I associate with wrestling–I apologize to the wrestlers out there if I get anything wrong.
Wrestlers train incredibly hard–lifting weights, running while wearing trash bags, and sacrificing to cut weight. I’ve got good news, your financial planning training is not a physical regimen; instead, it is developing good financial habits. Sidenote: It’s a great idea to keep yourself in good physical shape, but that’s another post for another day. Instead of pushing yourself to physical limits, financial planning training consists of creating a solid foundation by having a financial plan, a budget, living below your means, having an emergency fund, and saving regularly. Mastering these basic habits will put you in good shape to begin preparing for the obstacles you will wrestle.
The best wrestlers are mentally strong; they don’t break easily, and they often rise to the occasion when the going gets tough. In order to mentally prepare for financial planning, we can look to Marcus Aurelius once again. Aurelius is one of the most famous Stoics, and as a Stoic, he believed our reactions to the obstacles we come across in life are more important than the obstacle itself; we cannot control what life throws at us, but we can control our response (You can read more about this in another Holiday book, The Obstacle is the Way). Life never goes as planned, but if you expect the unexpected and accept sometimes it will be a blessing and sometimes it will be a struggle, you will be in a better position to control your response. You will be able to move forward through the obstacle, rather than submit and be pinned for a loss.
Stick to the game plan
Assuming you have properly trained (revisit above), you and your financial advisor have created a plan. But, having a plan is not enough by itself. It’s not a wrestling quote, and it might be slightly overused, but Mike Tyson said it best when he said, “Everyone has a plan ’til they get punched in the mouth”. A wrestler enters the ring with a gameplan playing to his strengths, but so does his competitor. It is the wrestler who sticks with his gameplan is more likely to have his hand raised in victory, not his opponent who makes a costly error deviating from his plan. The same is true when adhering to a financial plan; you enter with your plan, and life has its own for you. It’s important to stick to your plan when you adversity arises. We only need to revisit 2008 and 2009 to see a real-life example: deviating from a financial plan during the Financial Crisis would have been costly to a portfolio and the overall probability of success of a financial plan. It was not easy, but sticking to the plan and riding it out was the best course of action. Stick to the plan, unless…
When necessary, adapt the plan
I’ll be honest, I don’t have a good wrestling example for this one–this is where my lack of experience shows. Sometimes it will be necessary to adapt your plan in order to move forward. Yes, I know I just told you to stick to the plan during tough times, but there will be obstacles like disability or death which will require a reevaluation of a financial plan. During these times rely on your corner, your financial advisor, to help guide you to the new and improved plan–every great wrestler had a Ms. Elizabeth in their corner.
Fight the battle
Don’t give up. Even with the best training, mental preparedness, and properly managing your plan, there might be times where you doubt the plan. Remember why you have a plan. Remember what you are working towards–college for you kids, retirement, seeing the world, etc. These are your goals and they are important enough for you fight to reach them. So fight!
It’d be nice if life and financial planning were graceful like dance, but we have to fight to keep the opponent from choking us out. So train, prepare and fight.
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimer page.