Oliver Winchester manufactured the Winchester repeater also known as the "Gun that won the West." When he died in 1880, he left the company and his fortune to his son William who soon died of Tuberculosis and left an income of $1,000 a day, roughly $22,000 a day in today's dollars, to his wife Sarah.
Sarah moved to San Jose, Calif., and began construction of what is known as Winchester Mystery house.
Construction began in 1882. Fueled by an effectively endless income, construction continued 38 years, day and night without any apparent over-arching plan or architecture. The home is known today for its madness of design with doors that open into walls, windows looking into walls, doors on the second story that open to nowhere, and staircases that lead to the ceilings.
Sarah Winchester spent 38 years of perpetual building without a plan. Does that sound familiar?
I've seen many personal balance sheets that reflect a similar pattern. Clients that spent years accumulating assets and building wealth with no apparent framework. They built structures at points
in time to warehouse their assets that now work at cross-purposes to each other or serve a purpose that no longer exists. As clients transition through life their needs change and they accordingly need to restructure their wealth planning to accommodate new stages in life.
Let me ask some questions:
n Do you know and understand everything you have?
n Do you know exactly how everything you've accumulated fits together?
n How many have multiple strategies for the same purpose, but not on purpose?
n Do you have a process for identifying which future decisions are truly important to you and your family's success?
n Have you prepared things for your spouse and heirs to quickly take the baton without dropping it?
Many people retiring to Florida have similar design inefficiencies to the Winchester Mystery House. Many more in the wealth creation phase are bolting together unbalanced structures.
Whether building houses or wealth, building without a plan can lead to a real mess. Let's use the lessons of the Winchester house to focus on the needs of wealth management.
Think about the value architecture provides:
First it establishes a comprehensive view of our current state. It's really hard to figure out how to get somewhere if you don't know where you are in the first place.
Next it provides a future view of what we want our financial independence to look like, a target state. In the rare event the current state and target state are the same, it's time to celebrate. The rest of us have things that we want to change; the target state is different from the current reality.
Once we have those two states defined, the rest of the architecture helps us define the path to get from here to there. In some cases, there will be intermediary stages worth targeting. This financial blueprint is the guiding plan on how we are going to lead a life on purpose. It provides several good things for us.
n It includes a gap analysis between the current and desired states and produces the road map to get from here to there.
n It identifies inefficiencies in design and provides an overview from which to develop coordinated strategies to help resolve the issues.
n It helps align all future financial decisions with our highest priorities, values and goals.
n It can help free our minds from anxieties driven by external events outside of our control -- the markets, the economy, or politics -- because we are taking action where we have influence.
As a result, it allows us to focus on living our ideal lives knowing our financial houses are well engineered.
Gardner Sherrill, MBA, CFP® is the principal of Sherrill Wealth Management, LLC. Contact him at 941-462-2255 or www.sherrillwealth.com