Our lives are rarely static for long periods of time. Change can occur due to outside forces that we can not control or it can occur from a direct choice that we have made so if you continually expect change to occur frequently in your life then it will be less surprising when it occurs. The reason that I bring this up is because my partner and I recently adopted a puppy so the last few weeks have been very different from what we were used to. We have had to change our sleep schedules, our work schedules, our budget, and pretty much everything else that you could think of. The changes are welcomed but, as a financial planner, it means that every prior plan that I have made for our future requires some tweaks to reflect our current situation. Your chosen financial representative should understand this and they should encourage you to contact them to update your plan whenever a material change occurs in your life, especially one that will change your finances. Many different adaptations of your plan will need to be made over the course of your lifetime to reflect the changes that will occur.

Any change to your plan today, no matter how small, will have larger repercussions as you increase the length of time that you are planning for. This is a concept known as, “The Butterfly Effect,” which states that a small change today can lead to vastly different outcomes in the future. The main principle to keep in mind here is time. Time is one of our most valuable assets because it is finite and no one truly knows how much of it they have left. When it comes to investing, the length of time that you have to invest (called your investment time horizon) is going to be one of the most important variables in determining how to invest and what value to expect in the future.

When we are young, we have seemingly unlimited time but finite resources to do the things that we want to do. As we grow older, if we carefully plan, we should have all of the resources required to satisfy our wants and needs but it is time that seems to slip away from us. Time is valuable but its importance only becomes more clear as more of it passes us by. If only we could have told our younger selves to put away those extra dollars or make them think twice about a substantial purchase that was not truly needed. I know that my parent’s tried to do just that but, again, my younger self did not understand this particular relationship with time.

One exercise that I learned during the course of my career to show this relationship in a more tangible way is to think of a meter stick, just like the ones that you remember from your school years. A meter stick is one hundred centimeters long. In 2022, the average life expectancy in Canada is 83 years (rounded) so automatically cut 17 centimeters off the end of the meter stick. Now, think about how old you are today, and place a mental mark on the corresponding centimeter that represents your age. The distance from your mental mark to the new end of the meter stick, at 83 years, is the amount of time that you have left to live, on average. Just before your 21st birthday you’ve already burned up a quarter of your life and the middle of the way through your 41st year you will have reached your halfway point. This exercise can be eye-opening because many of us do not realize how quickly the distance to the end of the meter stick shrinks.

You may have been a late bloomer to have this epiphany about time as a resource but I can tell you that it is never too late to create a vision and a plan to achieve that vision. A plan, no matter how many times you are required to change it, is still the best way to ensure that you have the directions to navigate the tides of time to succeed in achieving the future that you envision. A vision without a plan is just an illusion and a plan without a vision is void of any feeling or emotion.

If you need help creating your own unique vision and subsequent plan then reach out to me at info@financerx.ca & if you are curious about our newest addition to the family, here is a picture.