Howard Gleckman, Senior Fellow at The Urban Institute, and Tom West, Senior Partner at Signature Estate & Investment Advisors, presented online for Goodwin House at Home on August 31, 2021. This blog is based on Tom’s comments on good decision-making on all things financial and healthcare.
Summary
- Expect the expected in a universe of the unexpected.
- In ambiguous circumstances, the best place to put your time, energy, and attention is inward.
- Measure yourself, with an outside lens, across your wealth, health, and family circumstances.
- Think about what can impede you and your family’s ability to make effective decisions in the face of uncertainty.
Think Ahead
Reflecting on the large demographic changes that Howard Gleckman referenced and some of the expenses related to care, I present a quote that both respects the challenges and the challenging environment that we live in and also gives us some fortitude in our collective capacity to persevere and to overcome.
Many of you may already know “O God, thy sea is so great, and my boat is so small,” the opening to a Breton fisherman’s prayer. Admiral Hyman Rickover gave a small plaque with this quote inscribed on it to President John F. Kennedy, who then shared the quote with all new submarine captains entering Naval service when he was in command. Sometimes when you’re trying to make decisions in the face of forces that are much bigger than you, the idea of taking proactive steps can feel overwhelming.
However, I want to take that quotation and spin it a bit differently. When I hear these words, I think: Rule number one — you need to know how to sail that boat. How do you make decisions that will give you the best chance of getting the best possible outcome for your family, your health, and your wealth through the years ahead?
Expect the Expected
We live in a world where the unexpected happens so frequently, and it overwhelms us. How do you make plans in a world with Covid-19 or the bank challenges during the 2008 financial crisis?
Start with expecting the expected. As Howard shared so clearly, we have a pretty good idea, from many established data sources, that most of us are going to age beyond what was possible ten, fifteen, or twenty years ago for large swathes of the population. Also, the overwhelming likelihood is that two-thirds of us are going to need help, in some way, shape, or form. One in eight of us is going to need extended help that could be cognitive-related, and that help could be really expensive. So, start by expecting that which is expected and plan around that. Consider yourself the fisher in the boat who recognizes some big things are going to happen. Your responsibility, where you have agency and control, is how you’re able to manage your own vessel.
Plan for the High Seas
Taking this metaphor of the boat a bit further, I also want to remind you in a positive way that boats aren’t built to stay in the harbor. Boats are built to sustain all sorts of weather conditions out on the high seas. There’s good news that we know, just like Howard said living longer has some really positive spins to it. It remains true that preparation and planning usually get better outcomes for people. Winging it usually gets fewer good outcomes, and completely denying things that should be pretty expected usually gets the worst outcomes.
Today, we are focusing on planning and thinking ahead while confronting decision-making with so much uncertainty. For example, I don’t know how long I’m going to live and I don’t know what kind of help I’m going to need. Furthermore, these two uncertainties are amid both the Covid-19 pandemic and the unprecedented restructuring of the way that the United States is trying to integrate housing and healthcare for the senior population, among other challenges. Where can we get information and make decisions that we can control?
Reflect and Know Yourself
The focus in times of uncertainty should be turned inward. Find a place where you can spend some time reflecting and knowing yourself. I’ll give you an example. I had a conversation with a close family member who was having a minor scrap with another relative. The family member said, “It’s a good thing that I get over things quickly.” As an objective third party, I replied, “No, you don’t. You hold grudges like nobody I know.” She said, “No, that’s not true. Give me some examples,” so I enumerated several for her. She reflected on it and later said, “I think that you’re right, and I don’t think I would have thought of that myself.”
Identify Your Weaknesses
It’s also useful to think about what kind of situations exist in the world. None of us are perfect, so what takes you off your game and makes you less effective in your own choices? The best decision-makers out there, from a psychological standpoint, already know their weaknesses and have communicated them. They are more ready to round out the resources around them to support themselves.
Again, profile yourself: What areas are giving you the most trouble? As a personal example, coming back from vacation on a Monday, I couldn’t find my notes for a presentation I was preparing. I emailed my co-presenter to ask for help because she’s prepared, and she knows that sometimes I need some additional support on managing details. I’m working on that.
Profile Your Situation
Once you’ve gotten to know yourself, then consider your circumstances with your financial, health, and family situations. As with turning the focus inward, consider profiling your situation in the third person, rather than in the first person. What is your profile — your wealth, health, and family structure and communications — if someone else did it?
Get a second opinion! Make sure that you have somebody objective who cares about you, who is literate in your situation, who can help you have a good understanding of your wealth circumstance, what your health situation looks like, and how your family structure and support situation actually look.
Decision-Making Skills
As you get to know and profile yourself, reflect on your ability, right now, to make effective and timely decisions. Our practice, and in my professional experience, has seen that this can help. For most of us, this ability is pretty good. Think back on the decisions that you have made through Covid-19 and the last two or three years about your wealth, your family situation, or your healthcare. Have those been good decisions? Is your decision-making likely to stay the same? If it changes, do you have a good support network in place that can give you the highest probability of getting outcomes consistent with your values?
Ask for Help
When you’re profiling yourself, it’s important to know if you can ask for help. I’m reminded that CEOs, high-profile athletes such as Michael Jordan or Tiger Woods, and people who are at the absolute top of their profession or their field regularly reach out for help. They may ask:
- What do you think about this thing with me?
- What’s your perspective on ways that I could improve this?
- I feel like I have a little bit of weakness in this particular area — how can I get some support?
- If I can’t do it myself, what resources do I need to get better outcomes?
The best and the brightest of us regularly ask for help — what about the rest of us? We’re sometimes reticent about asking for help. But, when you’re considering your family, your wealth, and your health, ask yourself: If I need some assistance with something, can I communicate effectively on these different topics? Can I seek out assistance? Can I get somebody to double-check my thinking? This self-awareness can drive better decisions on all of these different fronts in your life, which means getting better outcomes.
What have you learned about your ability to ask for help during the pandemic around those different spectrums? What have you learned about your ability to ask for help around expecting the expected? We’re all hopefully going to get older. Most of us will need some kind of help. What is your capacity to reach out and ask for assistance along these fronts? The capacity to ask for help is the first material variable that drives good outcomes.
Next Least Action
Consider areas in which your ability to be effective is put under pressure. Are you a decision-maker who tends to be conservative to a fault? If everything stays equal, do you feel more regret if you take an action and it’s wrong or if you do nothing and you get a worse outcome? Or, if you’re challenged by inertia, you should communicate that to people who care about you and to advisors who are around you so that they can help you take the next smallest action to make some progress on whatever path is ahead of you.
My Way or the Wrong Way
Another example of things that might pressure your decision-making: Are you somebody to likes to do things only your way? One of my favorite quotes is, “There are two ways of doing things — my way or the wrong way.” If that speaks to you humorously, consider what that implication is going to be down the road; double-check this or ask somebody to test you on it. Do you seek information that you already believe? Do you go out of your way to avoid challenging your beliefs and your worldview? If any of this is a challenge, you want to be able to identify and articulate it.
Procrastination Costs You
One last thing from a profiling standpoint: What is it right now, specifically, that you’re procrastinating? Write it down! In the middle of Covid-19, I’ll give everyone a pass for procrastinating some important decisions. But, I would also make it incumbent upon all of you, as effective decision-makers who are starting to see what a post-pandemic world might look like, to identify specifically which decisions you are procrastinating on.
My wife and I just became empty-nesters, and we procrastinated doing a whole bunch of home renovations. Now on deck is redoing the bedroom, the bathroom, and some work in the kitchen. We are just getting started, and the cost of our procrastination is everything is dramatically more expensive than we thought and we can’t even get a bid from somebody to do the work. So, we have to go back and think about how this is a much more significant project than we had expected. If you identify what you are procrastinating, you have a better opportunity to take steps to move through them.
Personal Responsibility
And the last lesson that I want to leave you with is: Think about what Covid-19 has taught you about personal responsibility. We need to be accountable – to ourselves, to others, to people we care about, to society in general – and apply that lesson to our self-profiles, our ability to know ourselves. All of us, individually and personally, are the ones who are most accountable for what happens next.
Conclusion
With many data sources pointing to longer lifespans and greater healthcare needs as you age, you must expect the expected in a universe of the unexpected. When faced with ambiguity, the best place to put your time, energy, and attention is inward. Measure yourself, with an outside lens, across your wealth, health, and family circumstances. Think about what may impede you and your family’s ability to drive effective decisions in the face of a lot of uncertainty from hindered decision-making to inertia, and from keeping control to procrastination. Think ahead to use your small boat on the wonderous seas!