A columnist at 50 looks back at 25

Source: MARKETWATCH

Commentary: Plan for what happens when youre making other plans

By Chuck Jaffe, MarketWatch

Last Update: 12:23 PM ET Jun 15, 2012

BOSTON (MarketWatch) If I hadnt cleaned out my nightstand a few months ago, I would have forgotten the envelope was there.

It said Do not open until June 13, 2012, and had been written exactly 25 years before that date, on the occasion of my 25th birthday. I had read something that spring of 1987 that suggested that people often lose sight of what they want as they age and life gets in the way, and that there is nothing like a reminder of your hopes and dreams to steer people back to the path they truly want.

So my 25-year-old self wrote a note to the 50-year-old me. It was a list, really, of things I hoped to have accomplished when I reached 50. I didnt tell my wife or anyone about it, I simply sealed the letter and left it like a time capsule.

This week, on my 50th birthday, I dug it out, and spent a lot of time laughing, as it proved the adage that Life is what happens when you are making other plans.

In talking to financial experts, however, what has become clear is that life-on-the-fly is precisely what people need to plan for: Adapt, improvise and overcome the short-term issues, while focusing on the important long-term targets.

Long-term goals

I would not say I was an insightful 25-year-old. At the time, I was a business reporter for the St. Petersburg Times in Florida, I was married but had no children and, apparently, I was convinced that I was going to be an ink-stained wretch in the newspaper business for life. My goals seem mostly focused on work and achievement; quite frankly, Im disappointed at how shallow they were.

I expected to be a high-level manager at a paper by age 50, with a healthy college-savings fund and a start on my own retirement savings.

My career was plotted out; its vividly unclear how I expected to achieve peace of mind or balance work with family.

Life changed that.

Before I ever got to age 35, it was obvious to me that I didnt want to stay on the executive track. By the time I was 40, it was becoming clear that the newspaper business was changing so dramatically that I had to consider some alternative, such as going to a business Web site. It was also clear that the stock market had stopped doing investors big favors and that income growth was going to stall in my chosen business.

Shortly after my 48th birthday, my brother Rob died, and I had a heart attack. Both events made it clear that my priorities had changed.

And so I hit age 50 this week with some of those 25-year-old missions accomplished and others aborted.

I also have a much greater understanding of how I and why I cant exactly picture what 75 is going to look like.

Changes in attitude

Thats why its important to have financial plans, to consider the unpleasant possibilities and insure against them, and to keep priorities fresh and current.

The list of goals I had at age 25 was appropriate for that time and place. Had my life turned out the way those goals were leading me, professionally speaking, Id be one unhappy camper by now.

I sat down this week and could not repeat the exercise done 25 years ago with anything that felt appropriate for the next quarter-century. Theres no new envelope in the nightstand, largely because theres not so much a list of goals any more, but rather a financial to-do list, whether its updating the will and estate plans, considering what happens to my life insurance coverage with the end of the coverage term just a few years off, whether to purchase long-term care protection in the next few years, as policies become available to me, and more.

The irony is that the accomplished missions were the ones that looked least important 25 years ago, and hardest to achieve. The thought of my career turning out differently than expected would have been devastating; the thought of falling short in retirement or college savings would have been laughed off with a joke about working longer and never wanting to retire.

As it turns out, the career turns were for the best, but the real satisfaction comes from seeing my youngest daughter head off to college this fall without having to be saddled with loans to pay for it, or from knowing that my family is protected as best as possible against my ill health.

Sure, theres a bit of retirement-savings catch-up to play the last decade in the market made that true for most people but its not as bad as it would have been had I followed my 25-year-olds day-to-day work and lifestyle goals to the exclusion of my long-term well-being.

I spoke with James Allworth, a co-author of How Will You Measure Your Life with Harvard University professor Clayton Christensen. The book applies principles people use to succeed in their business and financial lives to their personal lives.

Allworth notes that Christensen used the last day of class at Harvard Business School to ask students to look at everything with three key questions in mind: How can I find happiness in my relationships? How can I find happiness in my career? And How can I stay out of jail?

Allworth said many people put too much focus on what makes them feel good in the short-term, typically career achievement, and miss out on the things that provide the greatest long-term return, such as strong family relationships and balance in their lives.

We have this natural short-term bias to invest in the things that give us the immediate return, Allworth said. What will give us the greatest return in the long run are things where we have to invest for a long time before we see that return.

In life, therefore, as in stock-market investing.

Find a work-life-money balance that lets you not only reach the destination, but enjoy the journey.

Thats easy to lose sight of at a time when the market is crazy and the global economy is scary.

The best thing about that 25-year-old note is that it served as a reminder to tune out the noise and stay focused on what matters.

Sure, life is what happens when you are busy making plans. But if you take care of whats important and dont get bogged down by the day-to-day, life takes care of the rest.

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