In financial planning, developing financial statements is one aspect of the process. Financial statements (income tax, net worth and cash-flow) offer a place, scaffolding if you will, to hold meaningful conversations about where you are, where you are going and ultimately, to develop specific actions that get you closer to your personal and financial goals. The process can appear arduous when the data collection begins. Do we really need to know how much you are spending on your groceries or gas or entertainment? Well yes, all of your expenses are relevant and have an impact on your ability to make progress toward your goals. All of the financial data we request is relevant and assists you in your financial journey. Financial statements allow us to create “what if” scenarios for future planning. This practice is called scenario planning and, while not a definitive answer protocol, the work is an elegant aspect of our collective conversation and strategic wisdom. So why is it, when something is “good for you”, that allocating the time and energy to gathering the information is not where you choose to spend your time?
No doubt there are myriad reasons that could be listed here, but ultimately there is probably only one core reason: fear. There is fear of knowing that which we unconsciously choose not to know. This unconscious fear falls into three categories: the Ostrich Head in the Sand syndrome, the Chicken Little Sky is Falling syndrome, and the Lone Wolf syndrome.
The Ostrich syndrome is akin to “what I don’t know won’t hurt me”. I do not want to know that the life I envision may be impossible to achieve. If I don’t examine financial statements that show me I will run out of liquid assets by age 80, if I do not save more in my retirement account, (and by the way, I do not plan to live past 85) then that scenario may not happen and I will have worried for nothing. This posture is a way of taking less than 100% responsibility for your well-being. The external façade of joy and wellness is a jacket for the internal rumblings of fear and uncertainty. The Ostrich feels the wind and rain even though his head is covered.
The Chicken Little syndrome involves not wanting to know that everything I could wildly imagine for myself and my family is possible. I’d rather believe that we are on the verge of disaster. This syndrome may seem odd: who doesn’t want to know that their dreams can come true? Remarkably, there are plenty of people who are afraid of success and use money scarcity as an excuse for not pursuing their passion. If I know that I enjoy plenty of money to do whatever I want, when I want, with whom I want, then the proverbial mirror is perched directly in front of me to see myself. This illuminates the interior journey to the truth, the real barrier of not living up to my potential. When Chicken Little is still enough to look inside, he can gain great insight.
The Lone Wolf syndrome allows me to avoid reality by saying “I can do a rough calculation of income and expenses in my head, and that’s good enough.” The bravado of a confident wolf is often a mask for vulnerability. Creating financial statements based upon actual expenses is much more accurate than trying to retain the information in your head, a habit that often under-estimates expenses and over-estimates resources. This habit allows you to deceive yourself by claiming to know expenses and revenues when in reality you are not that certain. The Lone Wolf doesn’t always want to fend for himself and experiences relief in the company of the pack.
Ironically, financial statements are NOT the holy grail of answers. They are merely valuable reflections that open the door for further inquiry and conversation. They are NOT accurate. Everything changes, so they simply point to possibilities. If they are not accurate and they require so much energy to create, why bother? They are scaffolding that offers a structure from which to build. There are no static walls in life. This view allows one to gain more insight and expand awareness. Once you see more, your ability to navigate fear and uncertainty expands. This is the superior practice and ultimately our offering, not just financial statements but the ability to see more possibilities in the face of your financials.
Are you afraid of YOUR financials? Does the Lone Wolf, Chicken Little or Ostrich in the Sand resonate for you?
