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Four Dimensional Thought

Four Dimensional Thought

February 24, 2022

Four-Dimensional Thought

By Peter T. Waldron

Managing Partner of Waldron Partners

“Evolution has ensured that our brains just aren't equipped to visualize 11 dimensions directly. However, from a purely mathematical point of view, it's just as easy to think in 11 dimensions as it is to think in three or four.” -- Stephen Hawking

                 When I was a child, I was diagnosed with attention deficit disorder (ADD). This was difficult because it made me think of myself as different. It wasn’t until I started working as a financial planner that I began to understand the value of my “difference.” Having ADD allows me to think in an abbreviated manner about multiple trains of thought simultaneously, which is not the same as multitasking. Instead, I can take something that is complex and simplify it to develop creative solutions while sourcing various elements of unrelated disciplines. I describe this as thinking in multiple dimensions. Comprehensive financial planners must be able to understand all the elements – or dimensions - of someone’s financial life. We use our financial planning wheel (shown) to illustrate the comprehensive nature of planning. There is a certain level of interplay with each element of a person’s financial life.

                Basic arithmetic can only get you so far in financial planning. When you begin to incorporate the complexities of taxes, estate laws, investment performance, inflation, risks, etc., the equation becomes much more than basic. As an example, someone who is looking to retire must consider the following:

  1. How much money do I have saved?
  2. What income streams will be available to me (e.g., SSI, a pension)?
  3. How much do I want to spend in retirement?
  4. Should I include future gifting from parents or to children?
  5. Will I want to help with my grandkids’ college costs?
  6. How much will long-term care impact my plan?
  7. Plus, will I want to travel more?!

While this is just a surface-level list, it helps to illustrate that financial planning is not straightforward and simple. All of these items should be considered before someone gives notice and officially retires.

Furthermore, as you dig into all the dimensions of financial planning, there are also the complexities of human emotion to consider. This list includes greed, internal bias, fear, and anxiety, just to name a few. In the realm of financial planning, these need to be considered before a recommendation is made. For example, let’s say someone fears the stock market because they are concerned about losing money. Should they then stay in cash? A comprehensive financial planner must consider their goals. If they want to buy a home in a year, then cash is a suitable asset. If they want to buy a house in ten years, however, they can feel more confident that their funds will have time to recover if they invest in the stock market. While confidence and experience might not be enough to overcome the fear of loss, the use of modeling, analysis, and education (knowledge in general) can help to resolve it.

While knowledge can be a useful weapon in combatting emotions, it can also result in an influx of negative externalities. As a planning model is followed, the negative influences of life can start to seep in.

Let’s say that you have decided to sell your business. You receive an offer for it, but you think there might still be a better offer in the market because your friend told you to hold out. If the offer you’ve already received allows you to achieve financial independence or establish a legacy for your generational wealth plan, why would you allow negative outside interference? Pre-planning should outline all possible outcomes, how they might impact your emotions, and what influence external forces might have over your decision. And because of the pre-planning, the outcomes can be tested for the highest probability of success.  

Hopefully this article provides a basic understanding of dimensional thought while planning your financial future. Linear thought can only take you so far. You must incorporate the multiple layers of financial, emotional, and external factors to achieve a genuinely effective financial plan. Failure to do so would risk one-dimensionality, and that would deprive your future of the attention it deserves.       

 “The key to growth is the introduction of higher dimensions of consciousness into our awareness.” -- Lao Tzu


Peter T. Waldron, California Insurance License #0E47827, is a registered representative of Lincoln Financial Advisors, a broker/dealer, member SIPC, and offers investment advisory services through Sagemark Consulting, a division of Lincoln Financial Advisors Corp., a registered investment advisor, Waldron Partners, 3201 Danville Blvd., Suite 190 PO Box 528, Alamo, CA 94507.  Waldron Partners is not an affiliate of Lincoln Financial Advisors. Insurance is offered through Lincoln Marketing and Insurance Agency, LLC and Lincoln Associates Insurance Agency, Inc. and other fine companies.  This material is for use with the general public and is designed for informational or educational purposes only.  It is not intended as legal, tax or direct investment advice. Lincoln Financial Advisors does not offer legal or tax advice.  CRN-3727221-082021