Broker Check

Fighting and Planning

| May 06, 2019

“Everyone has a plan until they get punched in the mouth.” – Mike Tyson

Love him or hate him, Mike Tyson was a force to be reckoned with in his prime. For me, he always played the villain.

Here is the entirety of the quote, "People were asking me [before a fight], 'What’s going to happen?'" Tyson said. "They were talking about his style. 'He's going to give you a lot of lateral movement. He's going to move; he's going to dance. He's going to do this, do that.' I said, "Everybody has a plan until they get punched in the mouth.’”

The above quote was in reference to Evander Holyfield prior to the infamous ear biting [off] fight, which Holyfield won by disqualification the second time Tyson bit him.  Holyfield had a plan, and that plan undoubtedly changed when he was punched in the mouth (or his ear was bitten off). He was a smarter more disciplined fighter who knew and understood the basics and adapted.

Tyson, whether he knew it or not, was paraphrasing the World War I Prussian Chief of Staff, Helmuth Von Moltke, “No battle plan survives first contact with the enemy.”

Moltke was classically trained in military strategy, an expert in Napoleonic battle plans, but the current war (WWI) was different. The number, speed, and artillery of troops had changed exponentially since the turn of the century. The idea of having a detailed battle plan and executing that plan without compromise was over.

Whether a title fight, battle plan, corporate strategy, or personal financial plan, we need to know and understand the basics but continually review and be prepared to adapt.

As it relates to planning, we repeatedly see two major missteps. One, not continuously revisiting, modifying, and adapting to changing circumstances and goals. I recall a simple but indelible example of this from a few years back. We had a new client who had remarried and failed to update his beneficiary information. As this came to light in our first joint meeting, I was concerned we might see some of the more memorable parts of the Tyson Holyfield fight play out in our office – we thankfully did not.

The second planning misstep we often see is tied to investing. It is tempting to focus on investment returns and compare them to major benchmarks like the Dow Jones, the S&P 500, or maybe your neighbor. A properly executed plan coupled with a disciplined investment strategy should track and adjust to align with your established needs and goals

In pursuit of a long and fulfilling life we do not normally take more risk than we need to achieve a desired outcome. Can you imagine suggesting your doctor start with the riskiest treatment option? Most of us would not suggest our CPA take the most aggressive approach in filing our taxes – I said most.

Often, when it comes to investing, we see people taking on much more risk than is necessary to realize success. Let us pause and remember an essential rule of investing - you cannot expect larger returns without accepting larger risks. Why take the risk of maximizing returns when a more conservative investments will accomplish everything you and your family needs?

Every successful trip, mission, business, investor, or family should have a plan that addresses current needs and is flexible enough to adapt while taking no unnecessary risks.

We always welcome the opportunity to speak with you about your current plan and any adjustments that need to be addressed.