You’re ready for whatever comes next

Hosts Whitney Reagan and Daniel Sharkey explore the impossibility of predicting the future and the vital importance of building financial resiliency for the “unexpected.”

They discuss why a financial plan should act as a flexible decision-making framework rather than a rigid script, allowing you to navigate life’s inevitable speed bumps—from unexpected expenses to major life transitions—without derailing your long-term goals. Learn how intentional asset allocation, modeling “what-if” scenarios and partnering with an advisor can help you better prepare to handle whatever comes next with confidence.

Transcript

Daniel Sharkey: By definition, you don’t know what the unexpected will bring, but we’re here to talk today that you can build a financial plan so that you’re ready for whatever comes next.

Alright Whit, we’re back again, and this time talking about one of my favorite topics. And that is planning for the unexpected—

Whitney Reagan: Direct indexing? No, I’m just kidding.

Dan: No, we’ve already done that. I think we’re going to lose followers if I go off on that tangent again. So, we’re going to avoid that for today. For those that are interested, please go back and check out the 877 podcasts that I’ve done talking about that. I’m just kidding. But no, we are here to talk about what comes next in terms of planning for the unexpected, which I might add, by definition, is impossible.

But we’re going to talk about how you can actually do that. So, before we kick off and go into the details, I tend to think that the value of a financial plan, with a Mariner advisor in particular, allows you to not script out your life in exactly the way it’s going to be, but provide you a decision-making framework for when things happen that you were not planning for.

So, talk to me a little bit about how you think about that in the context of the clients that you work with in your own life, and how thinking about what to do next impacts your decisions when things come up that you weren’t planning for.

Whitney: Great question. Loaded question. We don’t focus on investments, right? We always talk about it’s a piece of the puzzle. And I think that we want to let the plan drive the investment strategy rather than the other way around. But a lot of people ask about investments and what we’re going to do during times of volatility.

And something that I hone in on and I really emphasize is that we’re being really thoughtful and intentional in the beginning about building the asset allocation, the strategic asset allocation, because I think it’s more important than investment selection to really align your asset allocation in the weights that we’re putting in, like risky assets versus conservative assets.

We are being thoughtful about that long-term asset allocation to then withstand any volatility, and that we’re comfortable if there is times of volatility or just times of uncertainty or just noise in the press. Anything can make the market just kind of freak out. But we’re doing that thoughtful asset allocation in the beginning to really stand the test of time.

Dan: Absolutely. And I’ll just give you a simple example about how to translate this into the world of financial planning in a very common thing that everyone who’s listening to the show right now will have. Think about when you go on a road trip or get in your car at any time. You may have AAA, you put your seatbelt on, you always use your blinkers. You have a spare tire in the back.

Those are all things that you may ultimately never actually use, and you don’t actually even consciously think about. Yet, they’re there in the event that you get into an accident. You always have a cell phone on you. In most cases, you have a GPS that’s loaded in. These are all things that are in very similar ways that we plan for on the financial planning end.

And if you take that analogy and you begin to think you may never ultimately need any of those things. But they’re there in the event that you get into a fender bender or you blow a tire, or you need a map or all of the different things that you face when you jump behind the wheel every single day. And I think to attack your financial plan with the same level of diligence is really important and allows you to not avoid the things that we’re talking about.

Someone getting sick, losing a job, a death in the family, a child who has special needs, any things that you weren’t part of your broad world plan. Those are things that can be addressed and accounted for as part of your financial plan.

That’s through asset allocation. It’s through making sure that we have a good sense of what our expenses look like. It’s making sure that you have extra liquidity in your portfolio. We never want to optimize anything in your financial life as if it’s not going to hit some speed bump in the future, right? That is a recipe for disaster. I’m a big cycling fan. I watch the Tour de France every year. I like to cycle myself—

Whitney: Do you cycle yourself?

Dan: I do, spandex and all, baby. We’ll do a live shot one day. I don’t think anyone needs to see that. But that is a perfectly calibrated event. Meaning these guys are on $50,000 road bikes. The pavement is perfectly calm. They’re well-oiled machines. You know what happens when 100 riders hit even the tiniest pothole?

They all crash, and they all go careening off the road because everything is so perfectly calibrated. And life doesn’t work that way. So, while you’ll never be able to know what those speed bumps are, pebbles or pieces of sand that create those accidents will be in the future. It’s just by definition; you can’t actually know.

You can create an ecosystem with your advisor that acknowledges that something is going to exist. That could be something as simple as, oh, a tree fell on the car or my AC unit blew or any of the other things that we always talk about on the show. But if you have that diligence into recognizing that something is going to happen, you don’t know when, you don’t know what, but you have to be able to respond to it when it does.

I tend to think that one of the biggest complaints and objections I have to a lot of the data that you read in white papers or on Instagram videos from other people who are selling content is that they act as if there is a perfectly efficient way to go through life, and life has other plans very, very often.

And you want to make sure you build in that resiliency and that backup plan or that ability to respond to an incident before it actually occurs. And then when it does occur, to be able to respond thoughtfully without disrupting your entire financial future is really, really important. Nothing is going to be perfectly calibrated.

Life is not so clean and easy. You know the saying of best laid plans, right? That’s really, really important. So, you know you’re ready for the unexpected when you’ve accounted for those speed bumps, not knowing what they are, but knowing that they will come.

Whitney: I’ll also just give a quick plug on an episode that I did not too long ago with a grief coach, and I only say this — well, she’s amazing, Jenny Danaher — but I only say this because she has a really amazing, incredible cautionary tale for those spouses, wives that were never involved in the finances. And the unexpected happened.

Her husband fell cleaning the gutters, fell, and ended up passing away, and her kids were 11 and 13 at the time. Just the most devastating story; however, it happens. Sadly, these things can happen. And if you can be prepared or at least feel like you know that you’re going to be okay, finance-wise.

Because if your advisor can model out scenarios and what ifs and break the plan, so to speak, and just make sure that you’re going to be okay, then I think that that should give you some comfort to be able to live your life—live your life and also be able to, we’ve talked about this before, but be able to spend and not feel bad about spending.

Dan: Absolutely. And all of those scenarios that you’re talking about can be modeled. You can dissect as to what happens. Now, the numbers on the page, and I remind clients of this all the time, are never going to be able to recreate the emotional expense that will be due when something like that happens, right?

You may have life insurance in the example that you just provided, yet you may not be able to handle the emotional toll even if your finances are okay. But what that means is that that’s one less thing that you have to worry about, because those emotional tolls are never going to go away. And if you have to layer finances on top of that, that’s where really poor outcomes ultimately come through.

And it doesn’t necessarily always need to be some dramatic negative. I mean, we talked recently on our graduation episode about 529 plans. Well, what if your son or daughter, who is very entrepreneurial, comes to you and says, hey, look, my landscaping business has taken off, and I know someone this has happened to—I don’t want to go to college. I want to go do this full time.

And you’ve got $200,000 locked away in a 529 because you were expecting little Johnny or Susie to go to Harvard. Well, that’s a positive outcome in the sense that you’ve raised your son or daughter to have the ability to take on that challenge and eat it like an energy bar—shout out Heroic.

To be able to do that. You’ve done a really great job. But now there’s a consequence to that. And that is you may have a bunch of money locked away that you were planning on using that may not have its appropriate end use anymore. That’s an unexpected twist, and that’s an unexpected event.

So, if you recognize that those possibilities exist ahead of time. If you have that sober realization that there are things that I can’t possibly know now, and life is not so clean and easy and singular, you will have a much, much better outcome. So those conversations are important to have.

They’re important to lean on an advisor who can guide you on, hey, we don’t know what it’s going to cost $20,000 a year for your house but we know it’s going to be something. So, let’s count on that now as opposed to just looking backwards and saying, no, no, this is what we’ve spent every year. Those are things that we can always help with.

Those are things that are critically important, and they will provide you a tremendous amount of peace of mind along the way. Not to mention the ability to handle this when they do pop up.

Whitney: Yes. I think a theme here is talk to your advisor or reach out to an advisor.

Dan: And ask them, what am I not thinking about? What can happen that I don’t—and look, we can’t predict the future as much as anyone else, but we have seen so many client families and so many circumstances. I was on the phone yesterday with one of my dearest clients who lost his sister to brain cancer, and she had been sick for quite some time and just now what comes next?

There are so many instances like that, both positive and negative, that just happens to be an unfortunately brightly negative one. But we’ve seen it before. It doesn’t mean that we’ve all emotionally experienced it, meaning that it hasn’t happened to everybody personally.

There are always things that are unique, but the ability to talk to someone who has seen something like that and has the tools and the fortitude and the balance to be able to help you through that while you’re dealing with the emotional baggage that naturally comes with that type of event. It’s critically, critically important.

So, to your point, it needs to be brought up. It needs to be accounted for. You need to understand where you sit. And if that means your plan gets a little bit less efficient, meaning that let’s say you have a little bit more cash than it’s perfectly optimal. You will find that when those events do occur, you’re very happy you made those choices.

Whitney: Well said. I think it’s really good to try and think and model out and try and get your head wrapped around uncertainty in a way that you’re just planning for it, but you’re not dwelling on it. I think that leaning on someone else, like an advisor, is just so useful in that respect, right?

Dan: That mental freedom is what we’re all after and what a Mariner advisor can provide. So, let’s wrap it there. If you liked this episode, please like, subscribe wherever you get your podcasts–Apple, Spotify, YouTube–and we’ll see you next time.

The views expressed in this podcast are for informational and educational purposes only and do not consider any individual personal, financial, legal, or tax situation. As such, the information contained herein is intended, and should not be construed, as a specific recommendation, individualized tax, legal, or investment advice. Where specific advice is necessary or appropriate, individuals should contact their own professional tax and investment advisors or other professionals regarding their specific circumstances and needs prior to taking any action based upon this information.

The information provided has been obtained from sources deemed reliable, however, the accuracy, completeness, and reliability cannot be guaranteed. Tax laws are subject to change, either prospectively or retroactively. Any opinions expressed are subject to change at any time, without notice.

Mariner is the marketing name for the financial services businesses of Mariner Wealth Advisors, LLC and its subsidiaries. Investment advisory services are provided through the brands Mariner Wealth, Mariner Independent, Mariner Institutional, Mariner Ultra, and Mariner Workplace, each of which is a business name of the registered investment advisory entities of Mariner. For additional information about each of the registered investment advisory entities of Mariner, including fees and services, please contact Mariner or refer to each entity’s Form ADV Part 2A, which is available on the Investment Adviser Public Disclosure website. Registration of an investment adviser does not imply a certain level of skill or training.

The advisor’s personal comments and results may not be representative of the experience of other advisors and there is no guarantee of future performance or success.