Broker Check


February 24, 2022


By Peter T. Waldron

Managing Partner of Waldron Partners

“A good system shortens the road to the goal.” - Ralph Waldo Emerson

                Wouldn’t it be nice to organize your financial life in such a way that things happen perfectly with no surprises? While that dream is not exactly a reality, it is one that many get close to with proper planning. Life regularly varies from the master plan, be it because of changes in the market or tax laws, births or deaths in the family, financial loss, or unexpected windfalls. It is how your plan adjusts to these variations that truly defines your success in having a perfectly planned life. How organized is your financial life?

                Over the last six months, we have seen substantial swings in the financial markets. Some of these swings have driven people to make uninformed and emotional decisions. While many believe that inaction in the stock market is a fool’s endeavor, I would argue instead that not having a long-term plan in place that prioritizes and organizes one’s goals will lead to foolish decisions. While we can’t control market volatility, we can plan for it. By understanding the impact of volatility, we can adjust spending, saving, and risk to ensure that a plan is achieved regardless of short-term fluctuations in the market. This is important as no one really knows what is going to happen in the market on any given day, and if they tell you they do, ask them to predict the future.

                While the future of your plan can be impacted by tax laws, and any administration can undo work that has been previously done in the areas of estate and income tax planning, it is how your plan reacts to these changes that determines your success. In organizing your long-term plan, when short-term changes occur that have long-term effects, you should be able to test how these changes will influence your long-term planning. Tax planning, like any other element of your financial organization plan, must be fluid and ever-changing as the environment changes. 

                Being adaptable in a world that is constantly changing is difficult, particularly when a major life event occurs like a death or birth in the family. While each of these events result in very different emotional outcomes, it is important to know how they will influence the life you have created. No one wants to think about death — it is a terrible but absolute thing that occurs. The idea is to proactively consider how a death in the family would impact your financial plan so, if or when this happens, you can focus all your energy on the emotional aspects of the event without having to worry about your money. The same goes for one of the arguably greatest part of life, welcoming a new child into the family. During this time most people are overcome with joy (and are perhaps very sleep-deprived) and shouldn’t need to worry about college planning, life insurance, or estate planning. In both the case of a new child and the loss of a family member, emotions are naturally high, and the state of your financial plan should be the last thing on your mind as it should already be organized for success.

                The emotions involved with an unexpected financial windfall or loss can also be substantially debilitating. Preparing and organizing your financial life around the possibility of either a catastrophic or euphoric financial outcome can be daunting because in both cases the mantra of “this could never happen to me” is prevalent. Having a plan preemptively in place to take on these very different outcomes is not only imperative but can also be the difference between future success or failure. Planning gives you a comprehensive picture and a better understanding around what you have, or will have, and can create specific dynamics on which to accurately decide the best course of action. For those who have had the good fortune to create wealth, the expectation that the wealth might eventually evaporate seems statistically irrelevant. But too often this nonchalant behavior leads to catastrophic devastation. As it says in Job 1:21, “Naked I came from my mother’s womb, and naked I will depart. The Lord gave and the Lord has taken away; may the name of the Lord be praised.”

                Whether it be the market, government, life, death, financial ruin or windfall, without proper planning what has been created may very well be taken away. While creating organization within your financial life will not account for or allow you to avoid every possible catastrophic event, with proper planning you can be prepared to handle the majority of events with confidence and increase the likelihood that you will have successful outcomes regarding your financial objectives. Organization and planning will not create perfection, but it can help alleviate the stress of life’s imperfect outcomes. You owe it to yourself to live the most financially successful life possible!  

“Think ahead. Don't let day-to-day operations drive out planning.” - Donald Rumsfeld


Peter T. Waldron: California Insurance License #0E47827

Peter T. Waldron 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 information should not be construed as legal or tax advice. You may want to consult a tax advisor regarding this information as it relates to your personal circumstances. The content of this material was provided to you by Lincoln Financial Advisors Corp. for its representatives and their clients.  CRN3247913-091820