Welcome back to the blog! As you can probably guess from this week’s title image, we are hitting the sky this week and comparing the process of taking a trip on an airplane to our personal finances.
This blog is coming in from 30,000 ft as I return from the wedding of my friend Alex, which I shared in detail last week in my blog post about best man speeches and personal finance.
If you missed it, you can read more about it here.
I don’t know about you, but anytime I am on an airplane, I have a little bit of a creative rush. There’s just something about seeing cities, mountains, oceans, or just the clouds fade into the distance. It makes me feel REALLY SMALL.
In my work as a Financial Planner, I have to constantly remind myself that the world I operate in is no different. It’s expansive, there’s a lot to look at, and for someone who doesn’t experience it on a daily basis, it can be either incredibly exciting or extremely terrifying.
This is no different than flying in the sense some people love to be in the air so much they chose to fly planes for a living. There are others (like my Mom) who absolutely dread the thought of getting on an airplane.
There of course are people who fall into every portion of the spectrum when it comes to their enjoyment or level of comfort with either.
Before you get started, don’t forget to subscribe to the blog at the form below. Next week, I am sharing a portion of my personal life, and a huge reason why I became a Financial Planner in the first place.
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This week, we are going to walk through a few examples of how flying and your personal finances are similar in many different ways.
Let’s get ready for takeoff, shall we?
Booking your destination:
Getting started with your personal finances and planning the course you will take for a vacation are packed full of many decisions to consider.
Just as if we were choosing our flights, hotels, whether or not to get a rental car, pre-purchasing or making reservations for the focal points of your stay, there are pros and cons to each financial decision we make in the beginning of organizing and executing a financial plan.
What bank should we use? Can we get a better rate or have lower fees with a specific provider? Will the technology at those institutions or providers be easy to use? What happens if things don’t go according to plan or we have to call their service team?
With nearly limitless options out there, it can quickly become a painstaking task to evaluate every single option. Of course with the internet, we can do a little bit of preliminary research to evaluate and understand a few different types of services or experiences we can expect when choosing these things.
Finding a financial planner can be an arduous task, from different fee-models to different areas of expertise, to working with an advisor who may or may not sell you products (and therefore have a conflict of interest), there are nearly infinite combinations of what working with a financial planner could look like.
Here’s a resource to help you get started: https://www.napfa.org/financial-planning/how-to-find-an-advisor
While I may be biased in the sense I am a fee-only financial planner, think of it from the sense of if you were booking a trip.
If you were to only contact one airline or one hotel, they have an incentive to make sure you book with them. They may promise you some level of service during their initial conversation with you, but buried somewhere deep in the Terms and Conditions you sign when booking, you may be surprised with something other than what you initially were expecting.
This is no different than working with a financial planner or advisor who only has access or a relationship with one single company.
Much like working with a 3rd Party like an independent travel agent, working with an independent financial planner can be a great way to know the pros and cons of each piece of your financial life, without worrying about their being a catch.
You may end up working with the providers of products you already know, but having a second set of eyes on the choices being made can avoid unnecessary or unwanted pain down the road.
If something goes wrong with your trip, your travel agent is going to know all the details of your trip, and be able to help reconfigure it for the smoothest route possible.
Beginning the journey:
I am sure we can all remember our first time traveling or having to deal with the logistics of a trip on our own. Maybe it was your first time going through airport security, checking into a hotel, or renting a car, but I am sure you were met with some stress and anxiety along the way.
Since we started with an airplane theme and I find most of my clients are the traveling type, I am going to stick with airport security for this example.
With both air travel and our personal finances, taking care of the prep work before we are actually leaving for our destination can make everything go much smoother.
Knowing what traffic will be like to the airport on a normal day, whether or not it makes sense to drive or Uber to the airport, where your terminal and gate are, and what is your best bet in terms of where to go through security can be of great help on travel day.
Of course, things like this can change on our specific travel day, but if you’ve done the prep work, you should be able to make adjustments along the way as needed.
With our finances, it’s no different. Knowing what you have, where it is, and having everything as organized as possible can make the whole experience of building wealth a lot less stressful.
When working with a financial planner, they should be able to help you make these adjustments when life happens and the route or gate number gets changed.
Personally, I view my role as a financial planner to be your navigation system. Should a traffic jam or flight change occur in your personal finances (inevitably…. Because of life!), my job is to recalculate your route, or send that push notification to your phone letting you know what the next steps are and how we will adjust.
You’re the one driving the car and can ultimately choose what direction we head, but I’m the voice giving you the details of what we can expect for the different options when life changes.
Of course, once we get to the airport, there is still the cumbersome task of going through security and making sure we are ready to board the plane.
Similar to utilizing TSA Pre-Check or Global Entry with air travel, there are ways to fast-track the process when creating a financial plan.
With a little extra attention to detail and time invested in the beginning, many of the headaches you could experience in working with a financial planner can be mostly avoided. While no process is ever perfect, I speak for myself and on the behalf of many of my financial planner friends that we want you to have the best experience humanly possible.
This entails gathering important documents (hopefully in a digital format), being as detailed as you possibly can without putting yourself through too much work, and just being your honest self from the start. You certainly wouldn’t want to provide fuzzy details to the TSA when trying to obtain Pre-Check, or if they were to ask a question before letting you pass through.
Ensuring your information is accurate and current is no different than sending your bag through the screener at the airport. While the scanner may randomly pick up something you didn’t expect, we can avoid most issues by simply following the guidelines and making sure we don’t have any of the items in our bag that are posted throughout the airport before we get to the security checkpoint.
When going through the planning process, we know it won’t always be easy to obtain or perfectly accurate information all the time. But, preparing well upfront will pay off in the long run. The more we prepare before we take off, the better our experience is going to be.
Knowing what we have in all of our bags, what is allowed to go on the plane or what needs to be put below, and making sure we have everything in the right spot before we get to the airport will make our travel day the most enjoyable it can be.
Onboarding and Takeoff:
Now that you’re through the screening process and have all your bags ready for takeoff.
Getting on board a plane is still one of the least enjoyable pieces of the travel process. People fighting for overhead bin space, sitting in the wrong seats, having too big of bags in the seat rows, I don’t think I need to share more than that for the well-seasoned traveler. It’s rough.
Personally, I still believe there has to be a better way than how it’s being done now. It was actually SO MUCH better during 2020 when airlines were trying to minimize contact with other people… why did we go back!?
While I could go on and on about how broken airlines are when it comes to boarding planes, the main takeaway I want to share in relation to personal finance is the order of operation.
All too often I get the “What should I do with my investments?” or “What are some good places to put my money?” questions when friends, family, or those looking to hire me when they reach out.
I want to be clear and say these are both GREAT questions, but in my personal opinion, it is the flying equivalent of boarding all the aisle seats first. As the rest of the plane boards, there will be stumbling into the other seats, and unnecessary disruption as the process goes along.
Investments are an incredibly important piece to most financial plans, but understanding what is present in the entire financial plan will shape how the investment philosophy and objectives are accomplished.
Just as your pilot would do for the airplane, the plane has to have the right amount of weight in the right places, the doors will be verified as sealed, final system checks take place, and then the all-clear is given by flight control to finally hit the throttle and get airborne.
This goes back to the last section about our prep work. Ensuring all the information we need is available is incredibly important, and allows for future adjustments to be made as needed.
In personal finance, getting married, having a child, or having a windfall from the equity compensation you may have through work all fall into the category of causing changes in our financial pathway. Knowing these are on the radar will help your financial pilot determine the best flight path.
I recently helped guide someone through the journey of determining their career move that will allow them to hopefully start a business someday in the next 5 years. Knowing this, we realized the course had to be changed from saving solely for retirement to figuring out what the right combination of savings in cash they could access (in a checking account) and their retirement accounts should be to make this possible.
What works for most might not work for you. In this case, having a one-on-one relationship with a financial planner can be the solution to making sure you’re not stuck following what may be “the way things have always been done” in the case of boarding a plane.
It’s also a reason I chose to start my own firm. I know I can’t serve as many people, or serve every single person who comes through the door as those who still serve clients in a traditional sense.
But what this does mean is, I don’t have to be the kind of firm that crams as many people into a tiny tube, but instead one that makes it an enjoyable, customized journey for my clients.
Prepare for landing:
Before you know it, your destination will be in sight.
As with everything else in this journey, there may be the off chance weather or the crazy traffic that can be at any major airport may hinder the ability to land exactly on time.
While we certainly don’t hope to have to circle the airport for too long or re-route to another nearby airport, having your tray locked and stowed in the upright position is all we need to do as we come in on our approach.
Just like with our financial goals, your travel destination will become increasingly clear as you descend closer to it. I don’t know about you, but I almost never stare at the runway when approaching a city I am flying into, that’s the pilot’s job.
I’d much rather take in the sights, the view, and start to think about the trip ahead. The same should be true with our finances, let the financial planner handle the gauges, the wind, the chatter over the communication channels, and watch the place you have been on this journey towards coming into view.
There may be that anxious excitement as the wheels touch down, but before you know it, you’re stepping off the plane to a place you at one point in time only dreamed of being at.
You’ve made it, your pilot thanks you for flying, and can’t wait to see you again next time you’re ready to take flight.
Until next time, make your own destinations and play your own game,