Everyone Has a Plan Until They Get Punched in the Mouth

If you could have a candid conversation with financial advisors who have decades of experience helping professionals, business owners, and families just like yours plan for their financial future, what questions would you ask? I'm Chip Munn, financial advisor, author, host, and CEO of Signature Wealth Group. For decades, my partners and advisory teams have had the opportunity to answer the tough questions for hundreds of our clients. Now we want to do the same for you. On the Signature Life Show, you'll hear answers to your burning and most perplexing finance, investing, and retirement questions from our Chief Investment Officer, Senior Wealth Advisors, Certified Financial Planners, and more. We aren't just financial advisors. We're parents, children, community leaders, and entrepreneurs with a passion for helping empower our clients to live life intentionally, what we call a Signature Life. John Tate, what's up, man?

Chip Munn, how are you on this fine Friday?

I am wonderful. Hard to be upset on a Friday.

It is hard to be upset on Friday. The sun is shining, I can see it through my windows. No rain clouds in the sky that I can see, so it's a perfect time to do the Signature Life Show.

When's not a good time to do the Signature Life Show?

But anyway, Monday, I don't think I could do it on Monday, but I can always do it on a Friday.

It'd be okay to listen to on a Monday. I hope that we'll be the kind of folks who pick people up. So maybe people can save them until Mondays, even if they come out on Fridays or listen twice. Uh, hey, be fine with me. You know, John, last time we talked a little bit about Signature Wealth and the company and kind of some of our philosophies, but we didn't get into the weeds. We referenced the idea of a Signature Life Plan, but we waited until today to talk about what actually goes into that. And so a big part of our practice and what we do every day is actually the planning of what goes into life. When you think about that, talk a little bit about what that means to you and from your standpoint, if you were somebody who was looking to begin the process of planning, where do you start?

That is a great question, and I think if you are married, it might be important to start with your spouse and start having some of these conversations with them. If you're unmarried, sit down with yourself, if it's at all possible, and start thinking about these things either in the shower, wherever you do your best thinking. Some of my best thinking comes in the shower, but that may not be the case for everybody. But it's a quiet moment of reflection in some cases for not only for yourself, but the other people that you want to include in your plan. As you live it. And we did talk about last time about it's not just something that we build and set aside. It's not necessarily an estate plan that you dust off every— I think last time we had an expert in here on estate planning, they thought we might need to dust those things off every 2 to 3 years. It's not like that. This is a plan that's something we build that is livable by you, by the people that are included in your life, and that means it sometimes can change even on a daily basis.

Yeah, if you look up the word plan in the dictionary, it's both a noun and a verb, right? So it can be the noun, that thing you dust off, or in our case, it's a verb. It's a living, breathing thing. It's something that is an ongoing process. And so a lot of times when people talk to me about how we plan, I tend to refer back to the idea of the old— if you know anybody, and I think I mentioned this last week that my wife was in journalism, you know, the who, what, when, where, why, and how. And so really there's a lot kind of in that model, or maybe that's even just storytelling back from high school or college, but those are the key elements, to put it simply, in a financial life plan is figuring out those little things. And a big part of that for me, John, kind of the first step in the process is just a reality check. Wherever it is, there you are. And the biggest thing I think, all progress begins by telling the truth. The mentor of mine, Dan Sullivan, says that a lot. And I believe that that's absolutely true. And I think the first step in any good plan is to identify, like any journey, exactly where you currently are.

Right. And the world around us is constantly trying to get us to unlearn what we already know and sometimes abandon those things that we know to be true. And sometimes it's for good reason. Sometimes technology may change or may do something different to change something that we know to be true, that we hold dear. But most of the time, those truths, those things that we hang on to, those are things that we have created our core beliefs, our value system around. Those are things we want to hold onto and certainly put into the plan that we are creating because we're putting those things into the lives that we are living. So we ask all those questions, the who, what, where, why, and when, and those are all questions that I'm going over with my son now as he writes his first book reports in 3rd grade. So that's always interesting, teaching him to use descriptive words and not to say, "Well, the food was delicious." because that doesn't tell you anything about what the food actually tasted like, but actually take some thought and time into telling the reader or the listener some actual evidence about what is going on so that they can have a better idea of what they need to do next or what they can expect when they encounter a certain situation. And so one of the definitions of life that we commonly come into contact with in our business are when people are ready to think about working less. And the time that people reach that idea of, "Hey, it might be nice to work less and play a little bit more." It's different for everybody. We spent a lot of time in the last episode talking about how everybody is unique and how we customize things to fit each person. I don't know that I have met two people that have encountered the thought When do I want to start working less at the same time in their lives? That can be just one example, but there are other examples of things that make people unique and different, but that's a common one that we get. It can mean something different to everybody. Sometimes working less in a job that pays you actual money and then replacing that time in your life with working on something that may not pay you money, but brings you or your family or the people in your life joy and comfort, that can be an exchange. And that can sometimes satisfy the idea that, yes, I want to work less at one thing, but replace it with something else.

Yeah. And I think the first part, right, is just understanding where you are right now in that, like you said, I want to work less. Really, that might be more of an example of where I'd like to be. Right now, where I am is I work too much. Or, I'm out of shape and I don't feel like I'm taking care of myself. Or, I'm missing time with my kids and I would want to be able to spend more time. Or, here's where we are. This is what I have. This is what I make. This is what I spend. This is what I owe. This is where I am right now. And then to your point, John, a lot of what I believe in building out a signature life plan, a big component of that for us as professionals is asking the right questions. Because what we want to get to is then that point B of where is it that we really want to go. I think it's maybe a magnet on my fridge, you know, "What would you do if you couldn't fail?" What would you really want to do if you could? And really defining that, what I have found, you mentioned specifically about quitting work or cutting back on work, the two biggest driving factors that I have found in 23 years of when it is that people think they want to retire come from two sources. Number one, when their parents retired. Mom and Dad retired at 65, I'm retiring at 65 because that's what we do. The alternative is, and kind of number two in that list, is what their friends are doing. So Bob and Sue are retiring at 62 because they decided that's when they could take Social Security and XYZ. So those are two big influences on when most people, when that original starting point of when I think I want to retire are driven in a lot of cases by those two things. What I find in my day-to-day work is when I then press down and we talk about that, a lot of times I'm talking to folks who don't want to hurry up and exit the workforce because for them it's a big part of their identity or because they actually like what they're doing or that's where all their friends are. And so in talking And through, again, kind of that uniqueness of maybe Bob and Sue were doing it because they were at a job that they hated and they couldn't wait to get out, or because they wanted to move somewhere different and they didn't have the ability to work remotely. So it's important to understand, again, kind of that notion that because everybody's unique, while there might be a lot of rules of thumb that people use or talk about, A lot of those are just mental constructs. And so one of the things I think, John, that we try to do as part of our process is to break some of those down and to get down to what really is important.

Right. And you mentioned that some people might make their own decisions based on what their friends are doing or people around them are doing. And it just brought to mind a book that you gave me at the end of last year, The Gap and the Gain by Dan Sullivan. One of the ideas that I think people can get from reading that book, and one of the takeaways that I had, and one of the purposes, I think, of them writing it was to make a point that if we are going to measure our lives against anything, our successes, our gains, we're measuring them against ourselves. If we're measuring what we do against an ideal or against someone that we see on social media or somebody that we went to high school with, it might be an ideal that we can't possibly reach or something that is not useful for us in this time and place. It can bring unhappiness instead of the opposite of being able to reach our goals and being happy about it. And so one of the things that we try to help people understand is that when we're creating these unique customized plans for them, we're comparing their own plan, their goals, the things they want to accomplish against themselves. We're not necessarily bringing their friends into it and saying, "Well, so-and-so's going to retire at 59 and a half because that's what their parents did. You should do the same thing if you want to feel like you're keeping up with the Joneses." It's none of that. What we do in our office is not compare and contrast you and your, or our clients and their situations against others and other clients. It's just comparing their own situations in their lives against their situations in their lives. And if we keep that in mind and in focus, the question of, am I on track? Am I doing the things that I need to do? Those are all questions that are much easier to answer if you're only comparing it against yourself and the goals that you've established for yourself, right?

Yeah, so I mean, it's a pretty simple formula, right? And if I could draw it out on the left-hand side, for example, of a sheet of paper, I typically put point A, or I just put the letter A, and on the right-hand, B. I draw a line between an arrow from one to the other because that's what we're trying to do. We're trying to take this life that we have, we're trying to define the life, point B, that we want to get to, and there's a line. Now, in reality, we all know life's not a straight line. It's probably pretty squiggly, but for the purposes of diagramming, an arrow between the two. And then normally, John, if I were drawing it out, I put X percent over the top. Cause what we find is if we know very clearly where we are and where we want to be, there's a growth rate for most people. Now, if I were having this conversation in my office, I would remind people Warren Buffett, whatever the third, fourth richest man in the world can probably, from what I understand about Warren Buffett, he lives in the same house he did 50 years ago. His wife puts correct change for his McDonald's breakfast in the cup holder every morning. He could probably live off of just the cash. I don't know what his goals are. He's planning to give all the money away, so he probably doesn't have to invest. For the rest of us, there's a growth rate, and it could be really small. For some folks, it's really big, but there's a growth rate to get from point A to point B. And then for us, John, I feel like our Goal is then to invest the money to be able to get that rate from point A to point B with as little uncertainty as possible. And so it becomes, where were you, or where are you, where do you want to be, and then how fast does the money have to grow to get there? Of course, money grows in two ways. It grows via investment over the long term, also grows by contributions. So these are inputs And those things are math. The planning part of living is where it really gets interesting. And I think that a big factor in that is continually monitoring. And as you mentioned earlier, am I on track? Not am I beating the S&P 500 or any kind of index. Am I on track to do what it is that I said that I want to do? Because you and I have both been around long enough, John, to have seen shiny object syndrome. Or the idea of take more risk because I can handle it. Mike Tyson said, everybody has a plan until they get punched in the mouth. Most people don't know how much risk they can stand until after they've already experienced it. And most risk tolerance questionnaires that folks get with their 401k plan at work or whatever, in my opinion, instead of saying, where am I? Where do I want to get? How fast do I need to grow? Instead they say, How much risk do you think you can take? And then they expose you to as much as you think that you can take. And I can tell you with almost 100% certainty that most people think they can take more than they can in reality. I've seen that in the late '90s, 2008, just a couple of years ago, last week. Um, you know, and so it's a big difference. And so a big part of that is setting out where you're going and then measuring your success. Like you said, John, against what it is that you said that you wanted.

I don't remember too much from my college calculus class. I do remember it was the only class in college that I had to get a tutor to be able to pass the class. But one of the things I remember from calculus is that a line— and you were just talking about drawing a line from point A to point B— but a line is made up of lots of little dots. If you were to zoom in on that line, that line may look like it's straight or constant or whatever, but it's actually a lot of little dots all at once. So that's just something to keep in mind. What we're talking about, these plans that we're making, they are a lot of little steps and changes, a lot of dots that get put together in one big line, and not necessarily big steps or big changes all at once. Because if I know anything about any grand gesture, any big item that I've ever tried to purchase for a girlfriend or whatever it is, I mean, those grand gestures don't last. They're not maintainable. It's all the little things you do along the way that make things permanent. And so that's how one of the ways that we get people from where they are today to where they want to go is by helping them make all those little steps and changes all the way along and realize that it's not just one big change or one big step that's going to help get them there and stay there.

Yeah. And I think one of the better sayings I ever heard, just in terms of general life advice, is to just do the next right thing. And I've tried to implement that in my own life, and it's definitely something that we've brought into our practice. At any given point, you have a decision that you can make. And so all you really want to do is have that point on the horizon that you're working or walking towards those goals. And then just focus on making the next right decision. And in reality, sometimes we don't know what to decide. And sometimes that decision's hard. And John, my hope is that over the coming weeks and months, we'll be able to share more information that help folks make that next right decision. In the meantime, though, if they have questions, they're welcome to reach out to either of us and let us know. Ask any of our advisors. Ask somebody. You know, there was an old commercial, John, I forget, it was probably for a treatment center that used to run when I was a young person. Don't ask me why I remember it, but it was called Charter, and their slogan was, "If you don't get help here, get help somewhere." And I think that's also my message for folks listening to this show. Sometimes things are hard, decisions come up, you just want to be able to do the next right thing. And if you don't get help here, get help somewhere.

Yeah. And the next right thing for us may be making another episode. And hopefully the next right thing for our listeners will be tuning in for that next episode.

We hope you do. We hope you do. John, see you again next week.

Next Friday.

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