My father-in-law built a playhouse for my children in our backyard almost 4 years ago. It’s a fantastic playhouse — and most of all — the children love it. They have climbed, swung, and slid to their hearts content. My father-in-law, a master carpenter, used the best wood and made it as sturdy as possible (it even withstood Irma!) After he finished, he suggested we should seal it to protect if from the weather and sun and asked that I wait 6 months so the wood could dry out. Four years later and I have still not sealed that thing. Now, it has accumulated algae stains and has noticeable signs of sun damage. All I had to do was spend one Saturday painting on a coat or two. It didn’t even have to be a nice paint job. Anything would have been better than the nothing it received. The reasons I didn’t? Well, I didn’t want it to rain right after I started. I continued to wait for the dry season (it’s Florida, the dry season is two weeks.) Secondly, I never took the time to work out a plan of attack before beginning the project. Saturdays came, Saturdays went. I had a problem of inertia. This extends further into the concept of financial inertia. What do we mean by “financial inertia”? While it can be a problem to solve in physics, the problem of inertia is a serious issue in the world of finance, and a very different one. To define financial inertia in a very simple way: people don’t get around to financial planning even if they know it will be good for them, possibly due to the fear of a misstep or being confused by the details, resulting in inertia. This has been the story of many people who have come through my office over the years, from all walks of life. The stories vary and they involve things like starting a plan in the first place, investing money that has been stagnating in cash for years, or even starting estate planning. Most of the time, this resistance isn’t born out of laziness. It comes from the fear of making an incorrect, costly decision — or feeling the barrier to entry is too high. The problem is perpetuated by inaction. How we solve the financial inertia problem The world of retirement planning has tried to help solve this problem of inertia when it comes to making financial decisions by adding target date funds to employer sponsored retirement plans. These are more simplistic investment options and help relieve the investor of the burden of picking proper allocations. This approach also includes a built-in, standardized amount to contribute to work as a guide, plus an annual automatic percentage increase so investors don’t fall behind. At our firm, we have added the ability to sign documents electronically and through email. This allows for even the busiest person to participate in a financial plan. Plus, the barrier of entry is easily manageable; most mutual funds will start an account with as little as $50 — so get your college students to start now! Moving out of financial inertia with the first step These are all great additions, but it only gets us part of the way to the destination. We, as the investor, still must take that first action. We must be ready to ask a professional financial advisor the questions that scare us about our future. We must sit down with our spouse and loved ones to make difficult decisions about the inevitability of life ending and the creation of an estate plan. We need to move off the sideline and address our concerns about the markets through education. Otherwise, as Dale Carnegie said: “Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.” These are important words for many areas of our life. The risk of inertia is great, and the reward of taking that first step can pay dividends throughout your life. Remember, I’m here to serve and help if needed! October 2019 Mutual fund investing involves risk including loss of principal. The target date is the approximate date when investors plan to start withdrawing their money. The principal value of a target fund is not guaranteed at any time, including at the target date. No strategy assures success or protects against loss.