When you read something here or elsewhere that you’ve not known of before, in what way do you process it? Do you review how the new info might’ve helped you years ago? Or maybe it would’ve easily helped you avoid a mistake you made years ago — one that put you on a financial treadmill to nowhere ’til ya caught up. Thing is, the information age is a lethal double-edged sword. View it as a good news/bad news joke.
The good news is that you have all that info and those bazillion data points at your fingertips. The bad news? See the good news.
As the title to this post proclaims, success doesn’t come from set recipes. We’re not baking cookies from a prepackaged batch of cookie dough, when all that’s required is to slappin’ the dough down onto the bakin’ pan, and turnin’ the oven on, per printed instructions. Investing requires different ingredients for different investors, even though their most important goal — retirement — may be the same as millions of others. What passes for real analysis, not to mention strategy(s) is often nothin’ more than over simplified formulas applied to broadly described circumstances, which are then recognized by thousands of people who think the various strategies/recipes/formulas apply to them. Again, we’re not bakin’ cookies here. We’re investing to create the most important thing there is as we grow older — after health ‘n family — retirement income.
What happens is that a particular strategy is put forth as superior. Any strategy, when assessed in a vacuum, can deliver damaging results when applied in the rough ‘n tumble of real life. Even if any particular strategy delivers positive results, so what? Could they have been better if using a competing approach? Are there distasteful long term consequences for which you’re currently unaware? How would you know?
And there’s the rub.
The decisions you as an investor made yesterday, make today, and will make five years from now — on what strategy(s) to employ — will literally make the difference in the quality and quantity of your income at retirement. But again, the real fly in the ointment is the reality that what worked in San Diego in 2000, would be a wish for a financial coma today. What proves wildly effective for Fred, would be foolish for Abby, even though on the surface they appear to be two peas in a financial pod. In fact, what made sense five years ago, might be the last thing to do now. There are too many crucially important factors involved in the decision making process as it relates to investment strategy to approach it as merely the catalyst to a simple recipe.
It’s almost never about the ‘best’ strategy.
Earlier this month my ‘CEO’ and his wife were in town for my benefit. The Boss and I took ’em out to dinner to say thanks. The chef at this place is well known not only for how fantastic her meals taste, but also for the many awards she’s won for excellence. From the appetizer to the main course, who knows how many cooking ‘strategies’ she brought into play, many in a wonderfully synergistic fashion. I won’t bore you with all the details — OK maybe a quick summary. Duck nachos isn’t on the menu as it once was, but if you ask for them, they’ll make it. Awesome. Then there was the porterhouse pork steak with a sinfully good reduction sauce. How many different strategies must it have taken to produce those nachos alone? Was the steak prepared using the same strategy(s) utilized in making the sauce?
Regardless of what you’ve read and heard, a single strategy ain’t gonna produce the retirement you want. Even those makin’ use of more than one strategy will generally fall short. What produces magnificently abundant retirements is Strategic Synergism — the blending of multiple strategies, often completely unrelated to each other, in ways that ultimately enhance your final results. When an investor realizes the hugely superior results obtained when combining multiple strategies synergistically, a whole new menu of possibilities opens up. Everyone agrees that cash flow at retirement is the goal. It’s how you get there, and how much after tax cash flow your specific Plan generates.
Sadly, the vast majority of Americans are creating what I’ve come to call a ‘FastFood’ retirement. Fast food is fun every now and then, but we all know what happens long term if you live on it. Strategic Synergism works in the kitchen, and it works when investing for retirement.
Photo: Sasha Wolff