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We often receive lessons from unexpected places. This was the case last weekend as I spent a few days in Southern California with my daughter. By the way, I find it interesting that as a parent, our children teach us lessons almost as often as we teach them.

After five years, Stephanie “took me” to Disneyland. If you are a regular reader, you know she and her mother are big Disney fans. While I appreciate Disney from many perspectives, I can think of many places I would prefer to spend my day. But, Disney (and the rest of the weekend) was full of valuable reminders and lessons.

 Disney plans everything

Since my last visit to “the land of ears”, I’ve read a lot about Disney’s original plans and current marketing strategies. Whether referring to Walt, Roy or current management; nothing is implemented without an informed plan.

I told Stephanie to watch how and where merchandise was located. As you exited most attractions, there were “opportunities” to buy souvenirs…just in case you really enjoyed that portion of the park. Coincidence? Hardly…this is carefully planned.

 Informed decisions: Looking Forward

An interesting observation was how important Star Wars has become to the park. When Disney bought the rights to Star Wars, many analysts believed Disney had overpaid (by a lot). That might be true on paper, but what I found interesting was the amount of Star Wars memorabilia. Even more interesting was the market segment difference between Star Wars and traditional Disney.

The “guest” looking to meet Mickey Mouse, Minnie Mouse or the princesses are likely different than the “guest” hoping to meet (and maybe battle) Darth Vader. I thought…the Star Wars purchase was so much more than just movie rights. You likely knew this as well but seeing it in person was enlightening. Disney had plans for Star Wars that likely weren’t considered by most. This was an informed decision with a plan of execution going forward.

Financial plans should focus on gaining the knowledge needed to make informed decisions. The most important piece of a financial plan is NOT the choice of the “best” mutual fund, stock or insurance product. It IS the acquisition of knowledge which allows you to make informed financial and money decisions. Taking the time to plan, ask questions, consider alternatives and execute creates an informed starting point from which you can measure results.

When considering Star Wars, the movie rights were likely a starting point. The vision beyond the current rights was the real value. The same could be argued about your plan. What is known today is your starting point. Your vision of the future is the real value and with a plan you have a starting point from which to measure.

 Looking forward

Given that we went off season (between the holidays and before summer), we knew some rides and attractions would be closed. We also knew the crowds would be smaller (by Disney standards) which was a big benefit for me.

I believe Disney completes this process annually. They review the past year (maybe more); consider what is working; what could be changed; what no longer serves them and adjust accordingly. Again, this is based on informed decisions (numbers rather than emotions). The walls that read “pardon our dust…” do not provide the best guest experience today but is necessary to better serve the guest of tomorrow.

Too often, financial advice is based primarily on today with limited future vision. Plans, including the planning software we use, default to minimizing costs today without regard for future options (and the value of that option).

For example, Social Security representatives focus on maximizing your payment today without the consideration of how delaying might benefit you and others. When considering your financial plan, sometimes it is important to delay a current “benefit” if the alternative better serves your ultimate planning goals. Without proper information, the decision that leads to more income today or less tax cost today will and should win. But, like Disney, sometimes you need to choose what is right for the future rather than today.

 Grumpy is not a mood, it is a lifestyle.

This phrase was printed on a T-shirt being sold in gift shops throughout Disney. First, I thought is was very funny and was applicable to me on certain days. In case you are wondering…no, I didn’t buy it and yes, Steph thought I should. The second thought was…are there enough grumpy people (or people who would buy this for someone else?) that this is a popular shirt? Is grumpy really a lifestyle? A rhetorical question.

Disney is arguably the leader of creating desired lifestyles. Again, they understand their strength. The “cast” refers to young girls as princesses. Most if not all Disney employees will address them this way, unless they are wearing ears…then they may become Minnie. I have no doubt those who are wearing Star Wars gear are referred to by something with a reference to battling the evil empire.

In real life, most little girls aren’t royalty. Sure, it is fun to be treated as a princess for a day (and for some a lifetime), but we return to reality. In real life, most of us do not live in a magic kingdom. We live normal lives with daily commitments. We have our own lifestyle.

Before running financial planning numbers, there is one phrase that signals a high probability of success. Even when I hear it in an introduction meeting, I am pretty sure the plan will reveal an acceptable outcome. That phrase is “we live within our means.” The greatest impact on any plan is the difference between income and spending. This is a lifestyle choice. It can be measured and adjusted as needed. It is surprising to most the impact a little saving has versus accepting a high level of investment risk. Making informed decisions about your lifestyle is a key part of any financial plan (but sadly overlooked by many financial “professionals”).

 Looking to be thrilled or prefer to play it safe?

I told Steph I think Disney has primarily two types of rides. The first is for the thrill seekers. This includes the roller coasters and basically anything that goes fast. The other is what I refer to as the “story rides.” For the most part, the story rides are similar. They tell a well-known Disney story. The Pinocchio ride is not all that different than Snow White or Roger Rabbit.

Investments are a lot like Disney rides. Some are full of octane. You win big or go home broke (the going home broke part is rarely discussed). Every bubble had one. Bitcoin and other cryptocurrencies may be the current “ride.”

We also have story rides. They aren’t thrilling. They tell a well-known story for those who are willing to listen. You know what you are going to receive. An S&P 500 index fund promises the return of the index. Sure, there are times of momentary excitement, but for the most part…the fund tells the story of the 500 largest U.S. companies (basically).

 Times change as will you

As we rode the story rides, I couldn’t help but think how exciting these rides must have been when first created. I believe Disneyland was opened in the late 1950’s. Even the most basic story ride would have been something few had seen before.

Today, Disney needs to continually look ahead or risk becoming obsolete. At one point, they were probably the only (or limited) theme park option available. Today, there are multiple theme parks in Southern California alone. Never mind the ease of travel today versus the late 1950’s.

As times change, new investments are created that address a problem or oversight not covered before. Unfortunately, the problem or oversight is often short lived. For example, there was a rush to market companies that would solve the “2000 problem.” They were exciting until they weren’t. Tech companies would change the world (and they did), but still were not worth the valuations once given them. Bitcoin was and maybe still is exciting. The reason the solutions didn’t live up to expectations is obvious…after the fact.

 I shouldn’t be surprised the rides most often “updated” seem to be the thrill rides. The story rides like It’s a Small World have likely been in operation with minor adjustments for decades. Story rides are the cornerstones of Disney. The simple “story investments” are the cornerstone of your financial plan.

Stephanie Returns

In my last post, I asked whether Stephanie should be included in my writings. The responses were heavily skewed in one direction and perhaps the most important input…” Dad, you have to include me in your stories.” So, while I understand and appreciate the input from everyone; Stephanie returns. I will continue to write her section separately so if you prefer, you can skip this section.

As you can see, Steph had a big impact on this week’s post. As you know, she and her mother are huge Disney fans. I told her I will back in another four to five years. She will not wait that long. My guess…this summer or at the very latest…Halloween.

She tried two new rides (Snow White and Pinocchio). She refuses to go on thrill rides. Given that most of the wait times were greater than 90 minutes, for what I assume is a 5-minute ride at best, I am happy to avoid them as well. Maybe, I should have bought the Grumpy shirt.

Perhaps the most interesting part of the weekend was her desire to try new things outside of Disney. We made it to the beach. We rented bikes. She built her first sand castle and played with seaweed. I was happy to sit on the quiet beach…the water (and air) was way too cold! I know…I should have bought the Grumpy shirt!

Everyone has a story

Disney is built on the ability to tell a story. Your ability to achieve financial success on your terms will be based on whether you write a good story.

In their simplest format, most of Disney’s stories are similar with a good message. They understand the importance of gaining and reviewing information; they make informed choices; they implement; they review and gather new data; and finally, repeat. They stick to a simple plot and from time to time…test new ideas.

You have a story to tell. While I can’t promise you’ll become a princess, I know following Disney’s steps provides a good base. Given that you are on this list tells me you’ve addressed step one. You are interested in gathering knowledge and information.

If you have completed a plan, you’ve tested the potential outcomes and have implemented the plan with informed decisions. You will reevaluate and adjust as needed. What seemed so obvious and important 10 years ago may not be important today. Like Disney, you will go through cycles. You will close rides and rebuild some parts of your plan and build on new plans.

Remember…this is your story. It may sound a lot like other stories you have heard, but it isn’t. Your specific needs, goals, desires and values create your storyboard. Careful planning and consideration provides your best opportunity to…live happily ever after.