Most humans would give their eye teeth to know what the future holds. This is why so much time and energy are expended on forecasts. And that’s a mistake.
Nassim Taleb advises us to “Invest in preparedness, not in prediction.” Being prepared means studying history, something humans seem to spend less time on than we do forecasts.
History teaches us no plan ever goes to plan. There are always surprises, unforeseen events – every outstanding victory or disaster has uncertainty at its core. Hence our approach to financial planning.
History shows us that storms blow through with regularity and there is calm before and after each storm.
Spending time and effort making sure bases are covered whatever storms blow through is time well spent. Time spent predicting the nature or timing of the storm is not.
Feeling safe is about getting comfortable with that and accepting the future is unknown and uncertain. Thankfully most things always work out well in the end, but if they don’t, a good financial plan will have your back.
Much as we might want it, there is no risk-free life, as financial advisor Carl Richards says, “Risk is what’s left over after you think you’ve thought of everything.”
No forecast is going to help with that, but history can.