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Why skill, luck and Rory McIIroy can teach us a valuable retirement planning lesson



When it comes to doing a lot of things in life there is always an element of skill and luck involved. However, when we evaluate the outcomes of our decisions we often put too much emphasis on either skill (if the outcome was good) or luck (if the outcome was bad).


Whilst watching a reply of the 2012 Ryder Cup, dubbed ‘the Miracle at Medinah’ after Europe made a stunning comeback to win on the last day, there was a particular tee shot that Rory McIlroy hit that summed up the journey of financial planning in about 350 yards!


Now, no one can doubt the unbelievable talent and skill that professional golfers possess and demonstrate every time they play. However, no amount of skill can outwit lucky events such as:

  1. The bounce of the ball

  2. The sudden change of wind direction

  3. A bird flying in front of the ball and getting hit

  4. The ball splitting as soon as you hit it

  5. The ball hitting a spectator in the rough and bouncing back into the fairway

  6. An errant shot hitting a cart path and bouncing 100 yards further than it would have

  7. The other players messing up to give you the win

The list could go on and on! Golf is one of those sports where luck can, and does, play a crucial part in success.


On this particular occasion, Rory stepped up to unleash one of his trademark drives. And so he did! The ball sailed through the air, right down the middle of the fairway, bouncing onto well over 300 yards until it came to rest with the perfect angle to attack the pin on his second shot. Only then did the ball roll into a big divot. A shot of the utmost skill with the worst possible outcome! (We will come back to this point later).


This got me thinking. We can have the best preparation, the best coaching, and the best foundation, but the outcomes of our actions are almost always down to luck. We simply can’t control the outcomes, no matter how good we are.


What's this got to do with retirement?


Well, from a retirement planning perspective, there are parallels between Rory’s tee shot and the financial planning journey. Luck (or the uncontrollable) will play a huge part in the outcomes of our retirement plans.


We may have the best laid plans, with clear goals and objectives in place, but unless we prepare for bad luck then we can get seriously derailed. With no backups or emergency plans we might not be in a position to affect our future in a positive way, even if luck has gone against us.


Like golf, luck can (and will) have a massive impact on the success of your retirement. Your plans may feel like you are going to hit that 350-yard drive, but there is so much that may get in the way of it producing the perfect outcome, such as:

  1. The markets

  2. Inflation

  3. Redundancy

  4. Ill health

  5. Early death!

  6. Unforeseen expenditure

And, of course, there are many, many more!


Back to Rory...


So, back to Rory. Fortunately, he had a backup plan. He knew that he could not control the outcomes of his tee shots, so he prepared for bad luck.


He spent endless hours hitting shots out of deep divots, knowing that he would have to play his fair share of these throughout his career. He knew that if he could take back control of an unlucky situation than he could move on and not let that bad luck affect his long-term decision making.


He could once again call on his skill to execute a shot.


Back to your retirement...


Let’s finally go back to retirement planning.


We all need to be more like Rory! We need to make sure that we prepare for the bad luck we will encounter. We need to ensure that all of our retirement plans carry ‘what if?’ scenarios that show us what the outcomes of bad luck look like and how we might be able to react and plan for when these scenarios present themselves to us.


If we prepare wisely, we can keep a cool head when luck goes against us. We will not focus on the outcomes but on the quality of our decisions, which in turn will allow us to keep our emotions in check and make wise financial choices along the way.


Once we come to terms with luck and skill being seen in equal measures, we can open ourselves up to some truthful discussions and give ourselves the ability to foresee bad luck and plan for as many scenarios as we can.


This will give us the freedom and peace of mind that we can hit the ball out of the divot if we are ever called upon to do so!

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