When questioned about his opponents style and technique, Mike Tyson is supposed to have said, “Everybody has a plan until they get hit. Then, like a rat, they stop in fear and freeze.” Soon, people who recognised the power of this quote embellished it to the title of this post. A look at how relevant this quote is to everyday life and in particular, personal finance.
When I first read, “Everyone has a plan, until they get punched in the face(mouth)!”, there was an instant resonance and identification with what it means. My wife who normally never lifts her head above her laptop screen when I talk personal finance (among other things! Yes, been married for a while), looked up and even nodded in approval! She knew what it meant. We knew what it meant, over and over and over again. Anyone who has lost a dear one, anyone whose life changed forever in an instant will react the same way as we did. The quote has extraordinary relevance to all walks of life.
How many around us think that,
- the insurance sum from Jeevan XXX policy is enough for them?
- they do not like policies which do not give them something in return?
- waiting to find ‘good’ term insurance provider is important?
- their corporate health cover is ‘good enough’ and a separate health cover is not necessary?
- equity will give them 15% returns for sure, because they believe in the ‘India story’?*
- they will retire early and pull off a 4% real return for the next 40 years?
- there is no hurry to write a will?
I could go on and on.
(*) Equity investing is done with hope. However, as entrepreneur Chris Lema said, hope is not a strategy!
Every time we procrastinate, that is, every time we postpone doing something important, we are taking life for granted. That kind of a plan will be destroyed until life decides to punch us in the face.
Mike Tyson’s quote is a variant of a succinct Yiddish proverb: We plan, God laughs.
Does life care to distinguish between those who take it for granted and those who plan meticulously?
Sadly, no. However, fall as we all may, the while idea behind financial fortification is that we do our best to build a mechanism that may(might) break our fall.
Excel illustrations are more of a ‘wake-up call’ than a strategy. At the end of the day, irrespective of what the calculator says, we only invest what we can. However, goal-planning calculators can warn us that something is wrong, either with our current lifestyle or our future expectations. It is, in that sense a valuable tool.
That said, After hours and hours of staring at Excel sheets, if there is one thing that I have learnt it is this: The most important inputs associated with financial planning are the ones that can never be entered in an Excel illustration.
I don’t know whether to laugh or be pained when some readers say, ‘since the future is uncertain, I might as well not plan and enjoy it while I can’.
Everyone has a plan until they get punched in the face! Those who recognise this while making a plan, get up that much faster.