Sun Tzu and the Art of Personal Finance Part I

Recently I’ve been playing this game called Panzer Corps.

panzercorps

It is an Operational level war game, as opposed to a Tactical level war game.

The difference is that at the Tactical level, you cannot decide what troops to bring into battle, what you have is already there and you can only use what you have to try and defeat the enemy.

battle-academy

E.g. In a Tactical level game like Battle Academy, you command individual units. 

At the Operational level, you are given command of a whole Corps, it is now a high level overview and you have to make choices in resource allocation to achieve your objectives.

panzercorps-level

E.g. In an Operational level game like Panzer Corps, you command divisions and battalions. 

You have your goals and objectives, you have a specific time schedule to achieve them, AND now you actually have to decide your unit composition to bring into battle. 

panzercorps-tanksThe many different types of tanks available to select in Panzer Corps

This freedom to choose and empowerment to allocate resources can be exciting to some and downright scary to others.

For me it is no different from planning and executing a financial plan.

We have our Financial Goals and Objectives (e.g. Retirement/Education Funding/Medical Funding), we have a limited time schedule with specific end dates to achieve our objectives (e.g. 20 or 30 years), and we have to make decisions in regards to the financial vehicles which can take us there.

But more often than not, we can get hung up on one, two or all three of the above requirements.

We may have vague and unclear goals (I want to retire in the future, don’t know when, no specific age, I’m still young, body still healthy, don’t want to think about it, future too far away, I don’t know how much money to retire on, 3 million I don’t think enough, not sure how much want to spend after retirement, Not sure how much for medical expenses, etc.)

We don’t have a schedule to accomplish our goals (I don’t know when I want to retire, work till I drop, keep working to earn more money, work as long as possible to earn more money cause medical expenses can wipe out all savings, etc.)

We feel helpless choosing from the many types of financial products available in the market, sometimes the products are forced upon us (investment returns is so uncertain, don’t know which agent can trust, not sure how to evaluate insurance, is the insurance right for me, serve my needs, how much is enough insurance, do I need a Will and Trust, is this loan the best for me, how to choose a property, how to evaluate an investment proposal, gold scheme, palm oil scheme, bird’s nest scheme, property club, etc.)

There are certainly many obstacles preventing us from optimising our Personal Finance Battle Plan and of course a personal finance professional can help to walk a paying client thru all that.

Personally I can identify the similiarity of skills required in making a good plan. And I like to think that doing one hones my skills in the other. In part II I will actually try describing financial products using military ideas, so stay tune for that. 

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