Do you really know what you want?

You will never know you’ve arrived if you don’t know where you’re going in the first place.

In this edition:

• Plan before you make a move

• Ask a lot of questions

• Learn like your life depends on it

Also some unpopular opinion.

EXPLAINER

Investing for life, pt. 3: On making plans

Photo by Mina Rad on Unsplash

You know what they say about failing to plan. So let’s plan.

In the last edition, we explored the importance of laying a solid investing foundation by understanding two things: philosophy and strategy.

These two elements help you answer your “why” and “what” in investing. But for them to come to life and serve you, you need a third component – a plan.

What is an investment plan?

Your investment plan is the actionable framework that connects your goals to your strategy and philosophy. It is the "how" of investing. A good plan will answer questions like:

• How much of my income will I invest each month?

• What types of accounts will I use? (e.g. CIS, brokerage, retirement)

• How will I measure progress over time?

Think of your plan as the blueprint for building your financial future.

Say for example your goal is to save for retirement in 20 years. Your plan may involve investing 15% of your income into a mix of index funds and bonds, rebalancing once a year and monitoring progress every quarter. Yes, it sounds like a lot, but it really isn’t.

Now connect the dots

How do these three principles work together? Let’s answer that with a reminder as to why all three are essential:

• Philosophy provides the "why"

• Strategy provides the "what"

• Plan provides the "how"

Together, they form a framework that you can follow and apply in a clear understandable way. Goals alone are not enough. And any advice to the contrary is misleading.

You need a clear direction (philosophy), actionable guidelines (strategy), and a structured approach (plan) to make meaningful progress.

Your turn

I believe that learning is fun, but doing is better.

I’ll leave you with 3 questions to help make this actionable.

As you reflect on your financial goals for the near future, ask yourself the following:

1. What are my beliefs around money?

   Do you know enough to feel confident with your decisions? Define your personal philosophy. Do you prefer simplicity or do you like to get into the details of the things you’re involved in? Clarity here will shape your outcomes.

2. How will I approach investing?

   Identify or develop a strategy that works for you. You do this by aligning strategy with philosophy. If, for example, you consider yourself risk averse, then build a strategy that emphasizes stability and capital preservation.

3. How will I stay on track?

   Plans yield better outcomes when they are clear. Make a plan that has specific measurable actions with least friction. Where possible, automate contributions to your investment accounts and determine when you will carry out periodic reviews.

A final thought

Taking the time to do this well at the beginning will ensure all your actions along the way will make sense. With each choice around capital, you will be answering “why”, “what” and “how” in relation to your goals. You will invest with conviction and you will own your results.

So before you invest, know yourself, understand what it takes to achieve what you want and then see what you need to do to get there.

Whichever way things go, investing is something you will be doing for the rest of your life. If there’s any way you can do it better, you should.

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THE BLUFF

You get what you ask for

Advice isn’t made equal.

You know this from experience.

So how do you ensure you’re getting the best answers? By asking questions. But questions are also not made equal.

And here’s an unpopular opinion:

Sometimes, you’re responsible for the poor answers you get because you asked a poor question (or you asked a good question poorly).

Here are three quick ideas around questions that I find useful:

1. Ask the right person (expertise, experience, authority)

2. Ask the right question (type, timing, setting)

3. Ask the right way (context, sequence, framing)

So wherever possible, I try to ensure that I'm asking the right person the right question in the right way.

You will get better at asking questions by asking more questions. So ask.

But you will get better at getting the right answers if you do it the right way.

The best part about this is you can practice with yourself.

Leave me a question about this in the comments (if I’m the right person to ask).

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NOTES TO SELF

Learning — the speed of right

Photo by Tim Mossholder on Unsplash

Knowledge is the foundation of personal growth.

Through learning you improve.

It is by first accepting that your knowledge is limited that you can become better at a thing — by acknowledging that you don’t know enough of it. Improvement requires humility and an acceptance that you will never know it all.

You will never have too much knowledge, but it is possible to have too little.

Adopting this mindset makes learning an enjoyable journey and a part of daily life.

Is it enough to know “enough”?

How many times have you acted on the basis of knowing ‘enough’, only to be slowed down by the results of such actions?

What you have known until now has got you this far.

Depending on how satisfied you are with life at present, you could say that you know enough. You certainly know a lot. But it can always be better.

You can learn much through your own reflections, but you can learn even more from others’.

There is always something to gain from another person’s perspective, even where you know a thing well. And you can learn from everyone with an open mind.

Play to learn. When you play to learn, you rig the game. When you play to learn, you can’t lose.

A learner’s mind is an open mind. An open mind questions the whole world, internal and external. And only through questioning can answers be found.

When you take on something new, or something old with a new lens, you realize that you can learn from everywhere if you choose to.

Yes, you know. But question what you know.

It sounds counterintuitive, but sometimes you must go slow to go fast. Learning feels cumbersome and like something that will take time away from action. We all love action.

But what’s better than action? Great outcomes! Learn everyday, and you will move faster with less effort.

The only real test of intelligence is if you get what you want out of life. –Naval

If learning is the answer, what is the question?

Wisława Szymborska, the Polish poet and Nobel Laureate in Literature, said:

Whatever inspiration is, it’s born from a continuous “I don’t know.”

When in doubt, ask.

AG

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