Measurement vs Calculation

{2:18 minutes to read} The subject of this blog is a concept I learned recently when I went to get fitted for my golf clubs. It had to do with 2 types of determinants: measurement and calculation.

The golf clubs were measured based on where I hit the ball on the face of the club. The computer also calculated how far the ball travels. The measurement is actually where the ball hit the club; the calculation is how far the ball traveled. My golf club fitter, Woody, shared with me that the measurement is accurate because you are actually measuring something, but the calculation can be off.

I thought about how this relates to our work with our clients and planning their financial future. How much social security a client will receive if they retire today is a measurement. How much money someone has in the bank today is a measurement.

Once we start projecting out, we are calculating, and those calculations can be very, very different. As we say in financial planning, the only truth is where you stand today. We measure today exactly what someone has, which is called their current plan.

Once we start projecting and calculating, we don’t know how well their investments will perform; we don’t know what the taxes will be. Calculations are riddled with determinants that are not going to necessarily be accurate. Measurements will always be exactly what they are today.

I share that thought to help you understand that, even though your calculation says that 97% of the time you will be okay, that does not mean it is going to be accurate. If you would like to have more information about how we do our measurements and calculations to help people with their insurance and financial planning, give us a call.

Registered Representative offering Securities through American Portfolios Financial Services, Inc. (APFS) Member FINRA/SIPC. Investment Advisory Services are offered through G&G Planning Concepts, Inc. which is not affiliated with APFS. Strategic Wealth Advisors Network and Gassman Financial Group are not affiliated with APFS.

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