The Crucial Importance of Planning

 Dark Cars 960


Dark Cars are Everywhere
One phenomenon that began in the last few years in Central Maine is dark cars - drivers who forget to turn on their headlights at dusk or even when it is completely dark. I've noticed more and more dark cars in early and late evening hours in Bangor and elsewhere. These vehicles are hard to spot at night and are a particular danger to people making turns. You may think the road is clear only to find out, too late, that a dark car is headed right towards you.

Dark cars are a great metaphor for unforeseen risks and hazards in all areas of life. Risk exists even if you can't see it. There is only one effective response to risk: Planning.



What is Planning?
Planning is a type of systematic thinking where you consider the future, what you want it to be like, what steps you must take to achieve it, and what risks and costs you will have to deal with to create the desired future. The future isn't free and costs not only money but also effort and vision. You must learn to see in the dark, to pierce all shadows, and to plan for all likely events.

At its finest, planning is a branch of applied statistics used to evaluate likely and unlikely scenarios, and identify the steps that must be taken to either reach or avoid a particular scenario. The supreme goal of planning is to seize control over an important portion of the future.

Planning is essential for business owners, individuals trying to come up with a budget for managing their money, and people trying to save for retirement. If you don't plan for a better future you may not have a future, or may not like the future you will live in.



The Mathematical Definition of Planning
Two different things must be considered when trying to create a plan:

The speed of reality and the speed of your reaction to reality.

The speed of reality is the rate at which transactions and events occur for a business owner or individual.

The speed of reaction is the rate at which you react to reality.

If reality is zooming along at a brisk pace, generating transactions and events, and you react more slowly, the result is usually a disaster: unconsidered circumstances will arise, risk and missed opportunities will increase. Unopened mail will pile up, uncashed winning lottery tickets will accumulate, coupons will expire, warranties will run out, etc. You will fall further and further behind.

But if you outpace reality and think ahead then risk will be minimized and opportunity will be maximized. You will plan for dark cars and other types of risk and prepare accordingly. You will see through a brick wall, stop disaster before it happens, and make a slight change to your life or business that will compound exponentially across many years to produce success instead of failure.

Recently, I was stopped at an intersection in downtown Brewer waiting to make a right turn. Another driver at the intersection waited for a green light to make a left turn towards my road. When the green left-turn arrow came on he began his turn. Suddenly, a dark car zoomed through a red light and missed the left turning vehicle by less than a foot. I caught a glimpse of the dark car as it entered the intersection and put my car into reverse and backed away from what might have been a three car collision. No one was behind me.

This is an example of instinctual planning where my reaction was a few hundred milliseconds ahead of a potential disaster. My planning was based on the worst case scenario (which fortunately didn't occur) - that the dark car would hit the left turning vehicle and the two of them would then impact my car. If a split-second act of planning could save your life, imagine what could be achieved by a few hours of long-term strategic planning.

This article is derived from a much longer, more in-depth piece I wrote on the subject of planning. In that essay I gave a precise mathematical definition of planning - I said that true planning begins when the speed of your reaction to reality is faster than the speed of reality. At this rate you are no longer merely reacting to the transactions and events of life, instead, you are pro-active. Like a good chess player you are thinking at least several steps ahead.



Many People Act as if There is No Future
Economists and psychologists have proven through many empirical studies that a majority of people heavily discount the future. They act as if the future is either very unlikely or won't exist for them at all. This is a terrible mistake.

Most life insurance companies are highly profitable because human life obeys the laws of actuarial science. The average person does indeed live to average life expectancy. This statistical fact allows life insurance companies to plan and budget and develop premiums that result in profitability.

Be skeptical of your gut reaction to a scenario where you must choose between receiving $100 right now versus $1,000 three years from now. Actuarial science and simple math both prove that most people would be better off choosing to receive $1,000 three years from now.



Predicting the Future
Good planning tries to predict the future in order to control it, and also to identify risks and costs that threaten whatever future it is you want to achieve.

In 2011 the European Union considered a 1 billion Euro proposal to build a massive supercomputer designed to predict the future. The so-called Living Earth Simulator would use advanced planning and modeling techniques to predict the future in a wide variety of contexts. See:

Living Earth Simulator Project


I'm doubtful that such a machine could succeed with a high degree of accuracy. Fundamental laws of physics (including Heisenberg's quantum uncertainty principle) limit the amount and type of information we can have.

However, it may be possible to build a machine that could predict the future one hour from now. This may be achievable and would be both extremely valuable in many applications and also an extremely dangerous and potentially disruptive technology.

Most people don't need a massive super-computer to predict and shape their future. Pencil and paper, common sense, and good judgment may be all you need to create a better future for yourself and family. I believe every person should have at least three plans: a plan for next week, next month and next year. If you don't have these three plans then you have work to do.


"A man who does not think and plan long ahead will find trouble right at his door."





George Adams
Certified Public Accountant Master of Business Administration
Tel: (207) 989-2700 E-Mail:
450 South Main Street: The HQ of IQ
Brewer, Maine 04412-2339

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