Financial planning vs the financial plan in hand

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A COMPASS will always point to the North. If I intend to move towards the West, I know which direction to turn and what’s the angle of this manoeuvre needs to be

Nowadays, we may not use a compass much in our daily life. Instead, we may be more accustomed to using GPS.

In a similar fashion, when we launch a GPS app in our devices, we decide our destination, and we will be shown different paths or routes to get to our destination with the estimated time of arrival (ETA).

These applications usually also show us how much time to take on each route based on our pre-set requirements, for instance, shortest time, shortest distance, or avoid routes with tolls, etc.

However, it is common to see the ETA changes after we have started our journey. The app will keep on refreshing the ETA based on real-time traffic conditions and what’s happening along the way. Sometimes the ETA become sooner, sometimes later.

I am sharing these notions about compass and GPS to point out that while they are useful to keep us on track by pointing us to our direction, changes do occur along the way.

Hence, whatever is “the plan” originally – in order to ensure we really stay on track – we have to keep the application online and keep checking the compass as we progress.

Financial roadmap

If we were to close the GPS app after deciding on a route to take and proceed with our journey, then we run the risk of losing our way in between – or not getting new updates as and when the landscape and situation on the road changes.

A financial plan is just like a map. A map that was printed few years ago could be wrong today due to changes along the road – or even disappearance or emergence of new landmark.

A financial plan that we have put together today will become different in relation to our needs tomorrow because there are so many things that we are unable to predicted today.

Financial planning vs financial plan

Financial planning produces the plan. The plan cannot be a one and done thing because life will keep on changing, hence we need to continuously engage in the planning process.

Therefore, it is the process that is more important. Having something like a compass, a dynamic map that changes with circumstances or a guide is crucial to the whole planning process.

This is perhaps why real financial planner work with their client on an on-going basis as a guide in the client’s life journey, offering support and guidance during different situations and intersections in life.

We work with the client to update their map to ensure they are on the track that they wish to pursue.

When you engage in the financial planning process, you are actually giving yourself an opportunity to course-correct at each major junction and important moment in life so that you can always make the best decision to guide yourself to live the life that is worth living.

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