Doug Peterson learned to sail when he was 10 years old and began teaching sailing by the time he was 16. To this day sailing is still a passion of Doug’s. Doug wants to share a story with you about sailing, crashing, and finding the bright side of the situation.
“Are we going to sink?” my wife screamed. We were sailing in the San Juan islands in Washington on our sailboat. It was a beautiful day. Waters were calm, and we were headed towards Thatcher Pass passing Lopez Island.
We had a thought, why don’t we head over to Spencer’s Spit? It’s a beautiful spot, great for crabbing! We can drop some crab pots and we’ll have fresh crab for dinner! Fresh crab is the best. It sounded brilliant so I changed our course!
I had originally set my GPS for Thatcher Pass and didn’t bother to change it. After all, I had been sailing for many years, I knew what I was doing and Spencer’s Spit was just a mile away. I knew there were some rocks about 100 yards over to my left and I was sure I had plenty of room. I changed course and we happily headed towards Spencer Spit on a beautiful sunny day, listening to music, sipping on a beverage, and truly enjoying how perfect the moment was.
Or so we thought it was…
All of the sudden, my 36 foot, 16,500 pound boat smashes into a rock that was submerged four feet below the water. The boat lurches forward, the prop comes out of the water and starts shooting water from the stern of the boat. My wife, Harriet, and I go flying forward and I hear her scream…”ARE WE GOING TO SINK?”
At that moment, I honestly didn’t have an answer for her. I thought to myself, if the boat was taking on water I would see it in the bilge (the lowest area in the boat under the floorboards). So I ran below and checked the bilge. Fortunately, there was no water leaking in.
At this point you might be asking yourself…what is the point to this story? Well let me tell you.
I wasn’t paying attention, I decided to go on autopilot because I knew where I was going, I could see where I needed to navigate the boat. I thought “I know what I’m doing, and I don’t need help from my GPS”. However, as we now know, had I looked at it I would have seen the rocks right there, not 100 yards away, but right in front of me. Funny thing is, over all my years of sailing, I’d passed this spot many times and knew to avoid it because of the rocks, but I just wasn’t paying attention.
What happens in our lives when we don’t pay attention? Let’s talk about an entirely different situation. Let me shift to your garage and you’ve finally decided you can’t use anymore because it is such a mess. You say to yourself, “I can’t even get in my car in the garage. I’ve got to clean it up.” so you do. You clean it up. You put like things together, donate items you’re not using anymore, and discard all the trash and junk. You pull your car into the garage, open the drivers door and feel that ease…and with that ease comes that thought…“why didn’t I do this sooner?”
A year later you walk back into the garage and it’s worse than it was before. But how? How can that happen? Well, it’s the same brain that got it messy, cleaned it up, and got it messy again. We managed it the same way we had before and got the same results.
John Maxwell said, “You either tell your money where to go, or you’ll wonder where it went”. Personal finances have a huge impact on our quality of life. I find most people are very busy and when it comes to their personal finances they are reactive. What would happen if you could decide where you money is going before you spend it? Would you spend your money more wisely? Would you reduce debt, set aside money for infrequent expenses like car repairs or Christmas or pay for your vacation with cash vs credit?
Imagine wasting less money. Say you take home $100,00 a year and 5% of that is wasted. Over 20 years this would total $100,000. That doesn’t happen by accident. When we decide what we want our money to do for us before we spend it we make better decisions. Money management and time management have something in common. When you look at all your time commitments you realize you don’t have a lot of extra time. When you look at what you want your money to do for you and take into account all the things that you need to set money aside for, you most likely will realize you need to make some tough choices.
Navigating your personal finances is a precursor to working with a financial advisor. What if you charted your financial course now. Where will you be in 10-20 years vs where you are heading now? If you had someone to help you navigate it would go faster and be easier.
But what about the boat? The impact had nearly torn the 3,000 pound keel off and the surrounding area had to be rebuilt with fiberglass. We were able to repair the boat but we missed six weeks of prime sailing in a short sailing season in Washington. Thankfully the boat was in better condition than before once the $16,000 worth of repairs were completed.
What happens when you have an unexpected expense like this? Fortunately we had an emergency fund so we can actually pay for the repairs on the boat that insurance didn’t cover. We also have an emergency fund for our personal finances.
Over half of the households in the United States do not have an emergency fund and over 35% of households making over $100,000 a year do not have an emergency fund.
I had one client say “Here’s my reserve fund” and he pulled up photos of his most recent vacation. It did look amazing, a little umbrella in his drink, next to a pool, sun shining bright! However, a vacation is not an emergency and they depleted their savings so when (not if) an emergency hits they manage it by borrowing money on their credit card and going into debt.
Where are you going? What is your course? Do you even know what direction to go in? You can navigate the waters yourself and potentially run into submerged rocks, damaging your boat and negatively affecting your journey, or set your financial course with GPS and reach your destination safely and sooner.