Distinguishing the Important from the Unimportant

Via Principles by Ray Dalio:

199) Distinguish the important things from the unimportant things and deal with the important things first.

• 199a) Don’t be a perfectionist, because perfectionists often spend too much time on little differences at the margins at the expense of other big, important things. Be an effective imperfectionist. Solutions that broadly work well (e.g., how people should contact each other in the event of crises) are generally better than highly specialized solutions (e.g., how each person should contact each other in the event of every conceivable crisis), especially in the early stages of a plan. There generally isn’t much gained by lots of detail relative to a good broad solution. Complicated procedures are tough to remember, and it takes a lot of time to make such detailed plans (so they might not even be ready when needed).
• 199b) Since 80% of the juice can be gotten with the first 20% of the squeezing, there are relatively few (typically less than five) important things to consider in making a decision. For each of them, the marginal gains of studying them past a certain point are limited.
• 199c) Watch out for “detail anxiety,” i.e., worrying inappropriately about unimportant, small things. 
• 199d) Don’t mistake small things for unimportant things, because some small things can be very important (e.g., hugging a loved one).

- Joe

Planning for the Inconceivable

"Now you out here all by yourself

Ask Steve Jobs, wealth don't buy health."

- Pusha T

"Even in my will, keep it trill, to the day I peel
Even in my will, keep it trill, to the day I peel
Even in my will, keep it trill, to the day I peel
Even in my will, keep it trill, to the day I..."
-A$AP Rocky

(Above, rappers Pusha T and A$AP Rocky explain the importance of proper estate planning documents.)

When it comes to estate planning and insurance, many individuals fail to even consider unlikely, nevertheless possible, outcomes. For example, when asked what is the worst possible outcome of a car accident, most individuals erroneously answer death. While this is definitely the worst outcome in almost all areas, when it comes to finances there are more challenging situations, such as total paralysis. Without digressing into government assistance programs, total paralysis requires a full-time health care worker, numerous capital improvements such as handicapped entrances and possibly an elevator, as well as countless other expenses. Unfortunately, this situation does not even cross the mind of most, leaving them unprepared when disaster occurs.

There are numerous other problematic situations, including mental deterioration, divorce (no one expects it will happen to them, but divorce rates are extremely high), cancer, diseases, etc. Everyone acknowledges these events happen, just not to them. This is why estate planning and insurance are so critical, and it is a financial planner's job to help an individual or family prepare accordingly. Pertinent documents include a will, durable power of attorney for healthcare, and advanced medical directive (aka a living will) to name a few.

Investments and taxes often get most of the attention as it relates to finances. However, estate planning and insurance are just as critical. While it may be impossible to plan for every scenario, it is wise to take a few specific precautions in order to be better suited to handle certain outcomes.

- Joe