Tactical aviation is all about planning.  That may seem obvious, but the depth and scope of planning are factors that are often overlooked.  Planning is so important to the Air Force enterprise that there’s even a process called “plan to plan.”

And yes, you read that correctly.

While there’s a material difference between the way the “real world” combat planners execute their responsibilities (imagine coordinating every single flight across the Middle East) and the way a unit-level pilot puts together a plan, the cognitive road map for solving any given problem is pretty standardized.  Why do we bring this up?  Well, quite frankly, there’s not much difference in how we approach financial planning and the way we solve tactical aviation problems.

From a behavioral standpoint it’s interesting to see that most people act — either momentarily or permanently — in three temporal categories.  Anchoring to information based on what category we’re currently enjoying can have a holistic negative effect.  That’s pretty touchy-feely, so let’s put some examples behind those words:

  • Focusing on the past
    • “2008 and 2009 destroyed my portfolio.  I avoid investing altogether.”
  • Focusing on the present
    • “My career supports my lifestyle.  I don’t need to worry about retirement until something changes in my job or life.”
  • Focusing on the future
    • “I need to reach my investment goals.  I was uncomfortable with this much risk during the last bear market, but I won’t make it to my goals if I don’t aggressively invest.”

I’ve admittedly simplified human thought processes here, but stay with me — I think you’ll see how everything plays together as we start outlining a financial plan.  Hopefully you can see the dangers in making decisions based on incomplete information thanks to focusing on any of the three “time” categories mentioned above.

However, what if we combined information from the three time categories during the planning process?  Based on the fact that I just asked that question after outlining the negatives of anchoring based on perceptions of the past, present, or future, I’m pretty sure you can figure out the answer.  Each time period plays an important role in the planning cycle, so let’s look at how we can use them to our advantage:

  • Focusing on the future
    • Allows us to define goals and desired outcomes
    • Motivates us to action without feeling overwhelmed or paralyzed by current events
  • Focusing on the present
    • Allows us to hold ourselves accountable to the steps we need to take to eventually reach our future objectives
    • Offers a real-time ability to assess our current situation and how it impacts the plan
  • Focusing on the past
    • Provides an opportunity to “debrief” recent actions, assess impact and construct any changes to be made or lessons to be learned
    • Gives us a foundation of experience that can help shape future decisions

From a tactical aviation perspective, thinking “down the road” during mission planning allowed us to visualize likely contingencies and develop countermeasures.  During our briefing we instructed radar mechanics, intercept tactics, attack parameters, and sensor gameplans — effectively establishing accountability for the tasks in the “present time” that would eventually help us reach our objectives.  After the mission we would spend hours dissecting the flight during the debrief… it’s where the learning happened, after all, and where we filled our “bag of tricks” with experiences that would help during the next sortie.  The too long; didn’t read version is simply this:  Incorporating the past, present, and future in the planning cycle helped us reach objectives and mitigate risk. 

Admittedly, the hardest part of the financial planning cycle is usually defining the “unknown unknowns” of future goals and desired outcomes.  How much do you really need in retirement?  Will Social Security be around?  What about health care?  We help clients through this process by “putting a stake in the ground;” that is, we talk through ideas, goals, expectations and then put pencil to paper and define the target… then we move on.  At the end of the day, however, we know how difficult it is to think about the future in such detail (and how unique and personal it is).

Getting past the goal-setting phase allows us to put realistic assumptions into place, set measurable milestones, and modify behavior to meet intermediate goals.  We had phases in combat aviation that provided a conceptually differentiated focus during different stages of the mission.  It could’ve been called “ingress” or “air-to-air” or “target area” or “off target” but the effect was the same: Everyone acknowledged we were in a new phase, modified actions to achieve the intermediate objectives, and continued with the plan.  Similarly, you’ll have different phases of your life that could be defined as “wealth accumulation” or “funding college” or “elderly parent care” or “retirement” that require different actions to meet the objectives of the here-and-now without derailing the big-picture plan.

A plan is more than a “check up” to make sure that you’re saving enough for a nest egg of a particular amount.  The planning process is living, on-going, and provides an excellent feedback loop to adapt to your current financial situation without losing the desired outcome down the road. 

One last thing:  Nobody enjoys planning when they’re doing the planning.  It’s laborious and often involves thinking about our own mortality (which is never fun).  The value of a solid financial plan sometimes doesn’t show up until much later on when you look around and realize that you achieved every goal that you outlined decades ago (and perhaps modified significantly as your life changed). 


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