There was a recent debate in our office as to whether a dog was a worthwhile investment. Those involved were staunchly opposed—I was on one side, adamant that the cost was worth the benefits, and those on the other side adamant of the opposite. Funny how that works. Like many financial questions, there’s not a clear-cut answer—it boils down to priorities and tradeoffs.
My husband and I have a Newfoundland/Standard Poodle (a “Newfiedoodle”) named Norman. If we invested the money we spend yearly on Norman, could we retire sooner? Likely, yes. Is that a solid argument to find him a new home? Maybe . . . but for me and my husband that thought is appalling. We got him when we were walking through a difficult season and the companionship, laughter, and joy the goofball brings to our lives is well worth the cost. But it may not be to you. And that’s OK.
In my opinion, a good financial plan should include a framework for weighing trade-offs. Decisions should always be weighed against your top priorities and the “why” behind them. The dog example might seem silly, but there are larger applications.
For example, let’s say your priority is to make work optional. Why? So you can optimize time with family instead of being chained to work. Let’s say you also love replacing your car every five years (or your fine wine collection or supporting charity. . . you get the picture). Quite possibly, there may be a trade-off required to “make work optional” sooner than later. Seeing the direct impact the frequency of your car replacements has on your retirement timing might lead you to replace your car every ten years instead of every five. Or maybe it won’t—that tradeoff may be worth it to you. But you can’t make a well-informed decision if you can’t conceptualize the long-term impact of it. Thus, the benefit of a plan that creates a framework for doing just that.
Rather than an advisor saying, “that’s the wrong decision,” it becomes a conversation more like this. . . “absolutely you can do that, but let’s look at the impact it has on your outlined priorities.” We’ve seen time and again the benefits of that type of thought exercise. It puts you in the driver’s seat, which is right where you need to be when making the best decision for your family. Your “Norman” may be your sailboat or annual trip to Disney--and that’s the beauty of a personalized plan!
The opinions expressed are those of PYAW’s Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward looking statements cannot be guaranteed.
PYA Waltman Capital, LLC (“PYAW”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about PYAW’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. PYA-21-23