I still remember the first Nokia cell phone that I owned. Solid and dependable, it was state of the art in its time. Then the iPhone launched in 2007 and in 2013 Nokia announced they were being acquired by Microsoft. At that press conference the CEO of Nokia said, with a tear in his eye: "We didn’t do anything wrong, but somehow, we lost." In six short years the iPhone and other smartphone innovators had surpassed Nokia due to Nokia’s inability to plan for the future.
This story is related in a book I have been reading, “The Day After Tomorrow” by Peter Hinssen, at the recommendation of a client. Although the book is written primarily as a business aid, I have found many of the topics applicable to our personal lives.
In particular, the author discusses how businesses spend the overwhelming majority of their time worrying about what needs done today rather than tomorrow or the day after. The lack of long-range planning often results in disaster or at the very least frantic activity and wild spending in an attempt to catch up with new competitors.
This can be applied to our personal financial lives. Yes, we need to pay today’s bills in order to provide food and shelter, but some of our resources need to go into planning for tomorrow (your emergency fund/savings) and the day after tomorrow(retirement).
Over the years I have spoken to many people in their forties and fifties who have not started any retirement saving. I often think it results in a sort of depression that hinders their ability to get started with that long-range planning. Which is another point in the book that the author calls MOP, or “Mess Of the Past.” Businesses will spend so much time cleaning up from past poor decisions that it can paralyze them from taking action for tomorrow or the day after.
Regardless of your past experiences with saving and planning, even a little bit of effort can make a big difference. Personal long-range planning does not require the kind of time commitment that it does in business planning. Checking your quarterly statements, monitoring your bank accounts, and having discussions with your financial advisor (and acting on his/her advice) won’t take as much time as you may think. Procrastination leads to lost opportunity, so start your planning for the day after tomorrow today.
We have many resources on our website to help you with your planning needs. Our primary financial planning software MoneyguidePro can help with everything from budgeting for today to checking your progress towards retirement. Call, email, or access my calendar to schedule a meeting to discuss any of these ideas further.