Inflation – Financial Planning
“If life were predictable it would cease to be life and be without flavor.” – Eleanor Roosevelt
Well, Mrs. Roosevelt was right, life has had a lot of flavors recently. As we look to the markets, we see a combination of federal stimulus funding, unprecedented stockpiles of household savings and the rollout of new vaccines, driving a surge in consumer demand, enabling many businesses to raise prices significantly for the first time in decades. Along with this inflationary pressure, the expectation of rising interest rates and further government spending have some investors, not surprisingly, on edge.
We continue to believe that planning is the most important factor you can control to be able to confidently live today. We compare the value of long-term planning to a story we recently read.
In the late 1300s, a group of workers built a dining hall at New College, Oxford. A key structural element of this hall was the enormous oak ceiling timbers that held up the roof. In the early 20th century, those timbers were beset by powder beetles — creatures whose handiwork is often not discovered until they’ve done irreparable damage.
Upon finding the infestation, college administrators were understandably concerned and set out to devise a plan to replace the ceiling. The only problem was that large replacement timbers weren’t available. As the story goes, the worried administrators eventually paid a visit to the college forester, who greeted them with: “We were wondering when you’d come calling.”
It turns out the original builders anticipated the beetle infestation and set aside a special area of college-controlled woodlands. There, oaks were earmarked as eventual replacements for the beams. Down through the centuries, those trees were off-limits to would-be harvesters. So, just as planned, when the college needed the lumber, it was ready and waiting.
What’s the lesson for investors? A thoughtful, strategic plan is crucial to long-term financial security. Sow seeds well before the need arises. If you are asking yourself, “Will I be able to maintain my lifestyle in retirement?”, allow us to help you take control and structure the right plan to allow you to live today.
