A while back I was paging through the Patagonia catalog at my kitchen table. Not only does Patagonia make fabulous products that last forever and have a sincere commitment to the planet; their catalogs feature gorgeous photography. I love looking and dreaming of “someday” trips.

There was a section highlighting two climbers who recently embarked on an ascent of the Fitz Traverse in South America.  A seven-summit climb spanning 13,000 feet of ice-covered rock, the Fitz inspired Patagonia founder Yvon Chouinard and is featured on the company’s logo.  As I read the comments of alpine climber Tommy Caldwell about his preparations, these words struck me:

“As climbers, we always try to stack the odds in our favor, increase our margin of safety.  We always try to give ourselves the greatest possibility of success. … I slimmed my kit [gear he carried with him] down to the bare minimum….  It had to be able to handle sun-baked walls at high noon to half-frozen waterfalls in the middle of the night.”

I immediately saw a parallel to my work with clients.  Tommy was setting out for a serious journey where he would encounter extreme conditions.  He deliberately chose to expose himself to great risks in exchange for what, to him, is a great reward.  And he had to decide what tools would best equip him to get there.

In working with clients to design their financial roadmap, we always start by getting very clear on what they’re trying to achieve, what they want their life to look like.  When making investing decisions, we have to know what the money is for.  Then we try to stack the odds to increase the probability of success, by using the right tools for each job.

Tools always come with tradeoffs.  Tommy literally weighed the gear he might carry with him and then measured that weight against the value the tool could create for him on the climb.

  • One of Tommy’s risks was sun and snow blindness.  The best tool is high quality polarized sunglasses.
  • Another possibility the climbers faced was getting knocked on the head.  To address this risk they climbed with helmets.

On our financial journey we face different risks.  One is inflation – the cost of living increases over time.  Another is longevity – most of us will live far longer than we expect.  The financial tools we can use to address these risks come with tradeoffs.  Going into the journey we must understand our gear.  Along the way we can tell if they’re working for us and doing what they’re expected to.  If they’re not, or if our needs change, we make adjustments.

As you think about your journey, here are some questions to ask about each of the tools in your “kit.”

  • What is it for?  What risks does it address?  Why is it the best choice for this job?
  • In what conditions does it really shine?  When will its “weight” overshadow its usefulness?
  • How is it different from the other gear in my kit?

While you’re at it, you might think about asking whether you’d like to source your tools from companies who align what they do with their values – as Patagonia does – since financial life planning is all about aligning our money with our values.  But that’s a topic for another day.

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