All plans, including your financial plans, are based on assumptions. What if an assumption integral to your life and well-being is wrong?

We know what happened in the past but the future largely is supposition. We seek forecasters and gurus who we believe can tell us what is likely to happen in the future. All plans, including your financial plans, are based on assumptions. What if an assumption integral to your life and wellbeing is wrong?

In any planning session, whether relative to your personal life, or in some other setting such as corporate, academic, or charitable, assumptions are made. Often these are accepted as givens and scenarios are fleshed out. How much time is taken to consider the implications if the assumption is flat wrong?

History is replete with examples of failed assumptions, especially those that may be disruptive to the old order. Robert Metcalf, inventor of the Ethernet said in December 1995 in InfoWorld magazine, “I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.”

Remember Y2K? Byte magazine editor Edmund De Jesus proclaimed in 1998, “Y2K is a crisis without precedent in human history.”

In 2007, Microsoft CEO Steve Ballmer declared, “There’s no chance that the iPhone is going to get any significant market share. No chance.”

When it comes to assumptions and forecasts, we might look to the ancient Greeks. In Plato’s tome, The Trial of Socrates, Socrates says, “I seek truth and wisdom...It is true that I encourage my students to question everything.” That ranks as sound personal advice.

Fred Mandell is a successful business leader turned acclaimed artist. CEO of The Global Institute for the Arts and Leadership, Fred believes in the power of the arts to spur positive change in organizations, society, and individual thinking. Speaking to an assembly of financial planners at a retreat in North Georgia recently, Fred emphasized, “The arts stimulate our ability to see things differently. They teach us to uncover what is hidden or not obvious. The arts offer a new way of thinking in an uncertain and complex world.”

Citing faulty predictions in the past, as we face accelerating change there will be a cascade of false assumptions that can lead to havoc and disruption if critical questions are not asked. Artists often use negative space, the space that surrounds an object in a image. As important as the object itself, negative space helps to define the boundaries of positive space and brings balance to a composition. Too often we focus on the image and fail to see what is in the negative space.

Imagine any assumption framed as a positive outcome. What are you missing in the negative space? What if the investment does not pan out or underperforms? How will that impact your life, your ability to provide for those who depend on you, your lifestyle in general?

You assume that a business deal will have positive results. What if it does not? Conversely, if you pass something up and it turns out to be a winner, what impact could that have on your personal life, business or professional success, psychological satisfaction?

You assume that you and those you love will live to a certain age. What if you don’t? What if one of them does not? We ask the same question about key business and professional partners? Failure to adequately prepare for adverse circumstances has ruined individuals, families, and enterprises throughout history.

Consider how old you are today. How old you will be in ten short years? Ten short years after that? What challenges do you see, positive and negative, in the next ten years? Ten short years after that? Consider the same life transitions time lines for your family members or any important team effort outside of your family.

What assumptions have you made about that future? About outcomes? What if you are wrong? In each case, how could that change the alternatives pursued, the resources applied, and the outcomes you desire and expect? How will disruptions that we know are out there impact your family, financial future, career, retirement, legacy?

As Fred Mandell said, “We live in a river of change. Some people just want to get to the shore and rest. Well, there is no shore. You have to develop the skill to keep swimming and thrive!” Asking questions, seeing beyond the obvious, discipline, and collaboration is part of the creative process central to thriving. And, yes, taking risks, as many artists do, is part of the process. Very few successful people got there without risk and failure as character- and wisdom-building tools.

With any assumption, “What if that’s wrong?” May be the quintessential question!

Lewis Walker is President of Walker Capital Management, LLC. Certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with Walker Capital Management, LLC. lewisw@theinvestmentcoach.com

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