A Story of Protection: We Already Planned For This
*All names and details have been changed to protect client confidentiality.
It's late on a Friday afternoon. I get a text from a client. Let's call him Matt.
He's letting me know that he has some big changes with his work – in that it's ending in a month. He has some questions about tax implications. And being the generous and kind person he is, he's apologetic for texting me on a Friday.
I give him a call.
First, I just want to check in on a human level. While Matt is a freelancer, this one contract was about 98% of his income. He'd been with them for a few years. Despite not being entirely happy with his work, and already starting to desire something new – it never feels good to lose a job. So first things first: let's be human about it.
After I give him some space to talk through what happened, how he's feeling, and what he's thinking about for his next steps – I bring it back to some good news.
"We've already planned for this."
When Matt and his wife started working with me earlier this year, they had a fair amount of cash sitting in savings. They needed help figuring out how to allocate it. And because I had flagged Matt's income concentration as a significant risk early on, I built protection around it into their plan.
Here's what that actually looked like:
We determined their "safe number" – how much cash they need immediately available to feel secure – and then added an extra 2 to 3 months of living expenses on top of that, specifically because of this uncertainty.
Their checking account already held a couple months of living expenses.
Their yearly travel budget was already allocated in a separate account.
We had even created a dedicated savings bucket for the big, predictable-but-surprise annual expenses that always seem to arrive with a large price tag.
We were in the middle of slowly investing their excess cash into the market – so there was still another chunk earmarked for a taxable account that hadn't been deployed yet. I told Matt: if it would feel better to hold off on investing that right now, that's another couple of months of cushion sitting right there.
Their cash position was strong. The buffer was already built in.
While Matt already had some exciting opportunities on the horizon – a strong professional network, a career coach he'd been working with, even a thought about picking up some bartending shifts if he wanted a change of pace – I reminded him that he had something more valuable than options.
He had time. He could exhale. Allow the transition to land. Recover his orientation – and then pursue what's next from a place of grounded-ness, not panic.
We wrapped up the call by answering his tax questions and putting together an estimated quarterly payment plan to minimize any unnecessary penalties come year end (while still encouraging him to double check with his CPA).
He hung up relieved and grateful. And as his planner, I was relieved and grateful that I was one of the first people he thought to call.
This is what risk mitigation actually looks like
So many people – and honestly, a lot of the financial industry – only focus on returns. "How much money are you going to make me?" But that's barely half the picture.
It doesn't matter how much you accumulate if you don't have a plan to protect it.
Risk mitigation shows up in a lot of different forms across a financial plan. Cash buffers and income protection are just one piece. It also includes things like:
Life, disability, and umbrella insurance coverage that actually fits your life
Estate planning – making sure your assets go where you intend, and that your people are taken care of
Business succession and key person planning for owners and founders
Tax, geographic, and sector diversification in your investment portfolio
Diversifying income streams so you're not one contract – or one market swing – away from a crisis
My job as a financial planner is to think about all the ways your plan could fail. All of the things that could interrupt that carefully laid out roadmap we work so hard to build. And then to figure out: what's within our control to protect against? What are the actual moves we can make?
A few questions worth sitting with
It's my spring planning season right now, which means I'm deep in risk and protection reviews with clients across the board – insurance, estate planning, business succession. But regardless of the time of year, I'm always making space in client conversations to ask some version of these questions:
What's concerning you right now? Is there anything keeping you up at night?
Are those concerns within your control?
Are they actionable?
How can we prepare?
You can ask yourself the same things. Right now, today.
There's a lot of uncertainty in the world at the moment – in the markets, in the economy, in life. And while this particular moment feels especially heightened, if we zoom all the way out, there have always been moments of volatility and doubt — and there always will be.
The question is never whether uncertainty will show up. It's whether your plan was built to handle it when it does.
Some risk you can diversify away and protect against. Some risk you simply can't. The work is to get clear on which is which – and then focus your energy on what you can actually do.
Matt didn't need to panic on a Friday afternoon because the plan had already done its job. That's the goal. Not a perfect plan that assumes nothing goes wrong. A resilient one that already assumed something would.
