It's natural to crave certainty even when there is none. Danger arrives at your doorstep when that craving becomes belief in the certainty of something occurring.
Charlie Munger, Warren Buffet's partner at Berkshire Hathaway, recently had this to say when speaking about how low interest rates have fallen around the world:
“I think it’s highly likely that the people who confidently think they know the consequences – none of whom predicted this – now they know what’s going to happen next? Again, the witch doctors. You ask me what’s going to happen? Hell, I don’t know what’s going to happen. I regard it all as very weird. If interest rates go to zero and all the governments in the world print money like crazy and prices go down – of course I’m confused. Anybody who is intelligent who is not confused doesn’t understand the situation very well. If you find it puzzling, your brain is working correctly.”
There isn't much Charlie Munger hasn't encountered before in the investing world. He's 91 years old.
Whether in your financial planning or any other area of your life, admitting that you don't know what's going to happen with any certainty is tough to do. It can also be a lonely existence as you're surrounded by many people that continue to delude themselves. But make no mistake, it is necessary to know what you don't. And as Charlie said, it is also a sign that your brain is working correctly.
The only thing we can know with any certainty is that things will change in ways we can not foresee.
You can choose to focus on the positive of knowing that which you don't. Accepting what you can not know opens you up to a whole new world. A world of flexibility and choice. A world where you can adapt and adjust as the unknowable occurs because you're not stuck behind the delusion of certainty.
Lifestyle financial planning is built on the premise of focusing your time and attention on the things that matter most to you and the things that are within your control. Knowing what you don't is a crucial first step in the process of creating and maintaining the lifestyle that you desire.