A few weeks ago, Reese and I were participating in a charity car show with her classic Mini. We’re both into classic British cars, so it’s a common thing for us to do. Anyway, while at the show we met John, the autocross chairperson for the Windy City BMW club. We talked classic cars for a bit, and they must have liked us since we were invited to participate in their upcoming autocross event with our classics (none of which are BMWs).
For those of you who don’t know, an autocross is basically a race against the clock. The organizers make a course out of traffic cones—usually in a large open space such as a parking lot—and then you are timed while you drive. The courses can be a bit complicated to learn at first, but since the race is against a stopwatch and not other cars, it’s a safe and legal way to have fun in a car.
The weapon of choice for the event was a 1967 Triumph GT6. It was my uncle’s car for 40 years before he was ready to part with it, and since it was the very car that made me interested in classic sports cars, I had to be the next caretaker. Since owning it, I’ve replaced the springs to lower the car slightly, changed the steering rack (and added a lovely wood steering wheel), installed a different transmission, rebuilt and changed the differential, and even found time to wash it occasionally.
Obviously, it was going to be slower than BMWs 50 years younger, but I was a bit surprised at just how much slower. A whole palate of vintage behavior reared its head, and I found myself sliding sideways as often as going forwards.
Weirdly, I found myself reminded of financial planning. You see, between sessions I found some time to talk to the other racers and inspect their cars to see what they did differently. Many of the BMW people take these autocross events somewhat seriously, and what I found was that the largest difference is made by the smallest changes. Something like running a few PSI less in the rear tires or small tweaks in wheel alignment can shave seconds off your time. Often times, I was coached that it helped to drive slower in order to make my time faster. While I had made many of the right decisions, I found myself going off course a lot more before I asked for some help than I did after.
I believe that a good financial plan helps my clients in the same way. It’s not the obvious things—you’re probably already doing those, or are at least aware that you should be doing them. It’s the hundreds of details that you aren’t always thinking of that make the difference. When should you take Social Security? What happens if your spouse dies more than a few years before you do—will the pension payments you’re expecting continue? Will it be enough? What if inflation outpaces your investments? Is an annuity the correct investment vehicle, or should you consider laddering bonds?
I found that the advice of experts did help my racing times, and it wasn’t that I couldn’t do some of the things they suggested—it’s that I failed to think of those things in the first place. You may find that professional financial planning advice works the same way. Incidentally, sometimes consciously making the decision to go slower can help reduce the violent swings and improve your results in both your autocross time as well as your investment return.