I don’t hide it well, but I love golf almost as much as I love what I do for a living. A few summers ago, I introduced the game of golf to my oldest son, Nelson. While sharing my thoughts on the game and how to play it well, it occurred to me that the advice I was offering to him mirrored what I often impart to my client about their retirements: Focus on your target, be ready to navigate hazards, manage your emotions, and trust your coach.
Focus On Your Target
You don’t just tee up the ball and whack it as hard as you can. You have to know where you want the ball to go. On a short par-3, the flag is probably your target. On a longer hole, there’s more to consider: What interim spot provides you the best chance of getting to pin? How risky is that shot compared to others? Which club is the best choice for that shot? Lesson: if you don’t aim, you might not like where you end up.
Retirement is much the same. It’s better to have a target in mind – what you want to do in your retirement and what legacy you want to leave behind – and a plan in place with the steps to get there. The path to the target, and the target itself, is different for everyone. For some, the target is very clear and a straight shot from where they stand today. For others, the target is reachable in steps. And for most, well, life has a way of presenting challenges, just as a golf course includes hazards, which we work through along the way.
Be Ready to Navigate Hazards
No one plans for the ball to land in a hazard like a sand trap, but when it happens, you don’t just give up. You get out your wedge and plan to put your ball on the green. Ok, it’s not always that easy, especially if the ball lands in the water.
It’s the same when life presents a challenge. I don’t in any way want to compare life’s hazards to something as trivial as a bad golf shot, but they can happen just as quickly and unexpectedly. Death, illness, and divorce are among the most traumatic life events, and they can flip our lives upside down in the blink of an eye. These events carry major financial implications that require decisions, often at a time of great emotional distress. And each requires its approach to address and overcome. Being able to coach clients through life’s hazards is part of my role as their advisor.
Manage Your Emotions
More than maybe any other sport, golf requires you to manage your emotions and your temperament. The late Arnold Palmer is quoted as saying, “What separates great players from the good ones is not so much ability as brain power and emotional equilibrium.” A golfer can’t let one bad shot derail their round, yet it happens quite often. It’s not easy to let the past go and focus on the present and future but being emotionally trapped doesn’t help you hit the next shot.
Likewise, your financial success and realization of the retirement you want can’t be tied to how you feel at any point in time. We understand the tendency to panic when headlines point to financial disasters. That’s human nature. But that human nature can cause people to be bad investors. I spend a lot of time protecting clients from their emotions, and from making emotional decisions to buy, sell, or hold their investments, which is generally happening at the wrong time. Our way of doing business – planning for cash needs 12-24 months in advance and establishing your cash reserve to cover those needs – is designed to prevent the need to react emotionally to headlines and near-term events.
Trust Your Coach
Many golfers take lessons at some point, and a good golf instructor helps get a new golfer off to the right start by teaching the basics like proper stance, grip, and swing. However, a golf coach teaches aspects of the game that extend far beyond when to hit your 3-wood versus driver off the tee, how to handle in-between yardage, or when to putt and when to chip from the fringe. A good coach helps teach you how to control your emotions. For most, instruction is short-term, but coaching involves a long-term relationship that relies on mutual trust.
Likewise, I’m proud to serve as my clients’ retirement coach. Most clients come to me with a general concept of the retirement they want and a collection of assets they have saved toward retirement. By understanding their background, and more importantly, their aspirations for the future, I coach them through how to fund that future. Together, we work out a retirement game plan addressing needs and desires that range from providing a lasting legacy for their loved ones to travelling around the globe. It’s not a one-time meeting. It’s a life-long relationship – one where I measure my success as a coach by the lives I’m able to improve in some way.