“You don’t know what you don’t know”

This famous quote, which is attributed to Socrates and Bob Woodward, amongst others, is one of the foundations of my life. I am reading a book called The Invisible Gorilla by Christopher Chabris and Daniel Simons. The book focuses on attention, perception, memory, and reasoning – which leads us to this startling conclusion: “Our minds don’t work the way we think they do.” Chabris and Simons once did an experiment that showed 50% of us, at any given time, will miss critical information, even when it is right in front of us.

That main concept is that we often see what we expect to and create connections that lead to erroneous perceptions.  What does this have to do with financial planning? Well, everything. 

Everyone has a finance “guy,” and when faced with the question, “Why is he your guy?” the answers are often interesting. I’ve known him a long time, we went to college together, we go to the same church… Are these really the criteria that we should use to choose a trusted advisor? Shouldn’t you be asking if “your guy” really focuses on your needs? Is he (or she) doing the best that can be done?

The way out of this situation is actually quite simple. First, make sure your data is correct, well organized, and connected to each other in the best way to produce useful information. Then, when comparing multiple “guys” make sure you are comparing the same data in the same way at the same time – so you are truly comparing apples to apples. We at Gainplan would be happy to assist you in any way we can.

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