The Cash Flow Clock - copy - Book - Page 109
The Cash Flow Clock
Planning With the Cash Flow Clock
They say that if you want to hear God laugh, tell him
your plan. Plans are limited and imperfect and
seldom work out like we expect.
The financial industry seems so worried about being
laughed at for being wrong that they do not even
bother to plan, especially for investors that fall below
a certain level of net worth. Instead, they collect
assets and dump them into generic portfolios based
on age and overly simplified risk profiles that can be
applied to millions of investors. Their primary focus
is to avoid getting sued, so they sacrifice performance
for overdiversification and hide behind compliance.
They justify their recommendations based on Modern
Portfolio Theory and the Law of Large Numbers
instead of considering the needs of individual clients.
It is unacceptable and unnecessary.
No financial plan is perfect, mainly because of the
unknowns that we have no control over, but also
because each decision we make involves some kind
of tradeoff. No financial product is perfect because
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