Planning for multiple futures

Planning for multiple futures - NZ Wealth & Risk

Apple recently celebrated the 10th anniversary of the announcement of the iPhone. 

The iPhone, and smart phones as we know them, are now so pervasive and central to the lives of so many that it's hard to imagine life without them.

It's hard to imagine life without having access to GPS maps wherever I am, or a high quality camera on hand at any time, or an ability to have a video conversation with my brother on the other side of the world.

It all feels so inevitable.

But if you went back 20 or 15 years ago, it wouldn't have felt that way. The iPhone or any of its competitors would have been hard to conceive. 

With hindsight, you might think that it all makes sense. Of course, computers were getting smaller and more powerful. Phones were starting to have cameras. Touch technology would have matured at some point.

And in terms of the apps that you most often use, it was inevitable that these would be developed. And surely, the reason the successful apps and services became successful was because they were the best, weren't they?

So here's my question. Fortunes have been made on the back of the iPhone. If it was so inevitable, why aren't you one of the people who made a fortune? 

It's because, as inevitable as it feels, the hardware and phone software ecosystem we have now wasn't inevitable at all. 

Check out this article from The Telegraph about "How the world reacted to the first iPhone 10 years ago". TechCrunch predicted that the iPhone would bomb. Steve Ballmer said it has "no chance [of getting] any significant market share". Nokia didn't think it needed to change its thinking in relation to the business. The list goes on. 

Which is my springboard for saying, for the umpteenth time, that we live in a world of uncertainty, and that while only one set of things happens, almost anything can happen. 

The best way to make God laugh is to tell him your plans. 

Life can go in many different directions. Who's to know what the world will look like in one year's time, or in ten years' time. Who knows what your own life will look like in one year's time, or in ten year's time. 

Which brings me to futurology. It sounds like astrology, and I am sympathetic to this sentiment. But when we step back, we can think about the future not in terms of specific predictions, but in terms of identifying potential themes, and possible directions. 

In this sense, we're all "futurologists". We make important bets about the future all the time. When we choose a career, or an organisation to work with, or we choose to invest in certain types of relationship, we're often making a bet that this will work out for us in the future. 

Futurologists - or people who (try to) study the future in a formal sense - often think about the future in terms of the "three Ps and a W". Namely, they think in terms of possible futures, probable futures, preferred futures, and wild card futures. 

It's worth doing the same at a personal level. 

  • Probable futures. 

Try this exercise. Think about what the future is likely to hold for you. 

If you ask me at the time of writing this, I'd say that over the next 30 years I'm likely to have a decent professional career (although the exact details remain to be seen); stay married to my wonderful wife (with some years of the marriage being better than others); pay off my mortgage (although I couldn't tell whether it will take 5, 10, 20, or 30 years); raise children who will go to university and eventually become independent and have children of their own. I'll have some great holidays and drive some nice cars. I'll stay in contact with some of my oldest friends. I'll maintain good relationships with family members. I will lose some people who are important to me. I'll make more friends and more people will be welcomed into the family.

  • Wildcard futures. 

These are the futures that incorporate black swans, or low probability, highly impactful events. These might lottery windfalls, radical technologies that improve the human lot (including human-friendly generalised artificial intelligence, or 3D printers that can generate virtually any product we want); personally catastrophic events, such as health issues impacting loved ones; or existential threats such as extreme climate change, nuclear war, or bio-terrorism.

The truth is, any single event might be unlikely. But unlikely events happen all the time. Being open to them gives us flexibility. 

  • Possible futures. 

One thing about entertaining wildcard futures is that it opens you to the the range of possible futures that stand in front of us.

Going back to my "probable" future, my career could end up much worse or better than I expect. I may end up in financial hardship - or I could end up even better financially than I expected or imagined. Something could happen to my wife or my children (for good or ill). I might become something of a hermit, or end up with even deeper and richer social relationships than I expected. 

  • Preferred futures.

After thinking in these terms, it becomes clear that there isn't just one future ahead of us that we can aspire to. There are many different versions of the future, and any one of these versions can be great.

It's easy to fixate on one particular vision of the future. But it's valuable to think of the future, and what we want, in a pluralistic sense. There are many directions your life can take that will result in positive outcomes for you and your loved ones. 

Should your heart be set on a particular job? Or a job with particular characteristics? 

As a general rule, the best life decisions are those that open up the widest number of desired futures - that make them possible, plausible, and probable.

In The Antidote, Oliver Burkeman discusses the benefits of being “effectually-minded”. Rather than focusing on specific goals, it can be valuable to look at the means at your disposal, and making the most of them. What happens if an opportunity comes your way that you hadn’t considered, but is perhaps better than you were aiming for? Do you pass it by, because it wasn’t your goal? Or do you say “thank you”, redefine your goals (or acknowledge that the opportunity aligns with your higher level goals), and take advantage of it? 

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Sonnie Bailey

Sonnie is the founder and principal of Fairhaven Wealth.

Before founding Fairhaven Wealth, Sonnie worked in the legal and financial services industries for over a decade.

Sonnie first became involved with financial advice as a specialist financial services lawyer. For many years, he was an “adviser of advisers”, reviewing thousands of advice files prepared by hundreds of financial advisers, and providing feedback in relation to the quality and appropriateness of advice; industry best practice; risk management; and regulatory compliance. He has published work in industry publications and spoken at various financial advice conferences.

Sonnie has also worked with banks, investment management firms, insurers, and derivatives providers.

Sonnie has worked as a private client lawyer, focusing on succession, estate planning and trusts. He ran his own legal firm in Australia before relocating to New Zealand. He has also acted in independent trustee and company director positions.

Sonnie is passionate about helping people achieve their goals and manage the risks to which they are exposed.

He has written extensively on his blog, New Zealand Wealth and Risk, which can be found at www.wealthandrisk.nz.

Sonnie is married to his wonderful wife Chrissy, and has two young children, Ben and Anna.