Growing up in Florida, my father and I often went fishing in the beautiful waters of Biscayne Bay. Our favorite spot was the Finger Channels, a grouping of narrow channels between shallow reefs and sandy areas known as flats. At high tide, fish would come in and feed on the reefs and flats and then swim back to the channels as the tide went out. Fishermen would take their boats into the flats when high tide provided ample depth and then move their boats into deeper water as the water drained.
The concept seems simple enough, but fishermen would often find themselves aground – stuck in the shallows without enough depth for their props. If this situation was recognized and addressed quickly, a fisherman could pull his prop and pole his boat off the shallows and into deeper water. If it was not addressed quickly enough, the boater could find himself enjoying an evening on Biscayne Bay – a particularly unpleasant situation if there was not ample bug repellent on board.
Reflecting on those great days of fishing and boating, I realized I learned a lot while on Biscayne Bay. Interestingly, the lessons weren’t simply about nautical navigation and angling. Much of what was learned applies to personal finances. Take a look at the financial concepts I gleaned from the Finger Channels:
- Assess where you are: It is important to assess the water: keep an eye on the tide, the depth of the water and how to get back to deeper water. Financially, step 1 is to assess what you have by way of investments, income and debt. This exercise may indicate you are in some shallow waters. Although your situation may seem bleak, languishing in frustration only means the waters will get shallower.
- Determine your course: There is a distinct difference in how shallow waters appear and how deeper, navigable water appears. When it is time to leave the flats, deeper water needs to be identified and followed. The same applies to managing money. After your financial situation has been assessed, it is imperative that deeper waters like paying off debt and prudent investments are identified and followed.
- Follow a course to safe harbor: As our day of fishing wrapped up, my father and I followed channel markers to the marina. With investing, look for channel markers but remember, investing, like boating, is not a straight shot to the dock. At certain points, the course of the channel requires that you change your heading. Investing as a 30 year-old in the early stages of a career is quite different than investing as retirement nears. There are different headings in each situation and different channel markers showing where safe water can be found.
- Sometimes, you need a guide: Although Dad and I knew the waters of Biscayne Bay pretty well, we would often go over to the west coast of Florida and fish the waters off Flamingo and Everglades City. These waters are beautiful. There are countless islands and shallows offering marvelous habitat for birds, marine life and fish. But if there ever was a place where the unknowing boater could get in serious trouble, it is here. Where there are channels, many are marked with posts that at best resemble driftwood. There would be no challenge to getting hopelessly lost. So, when Dad and I went to Flamingo, we had a guide waiting. With a guide, we had numerous successful days fishing and always got back to the marina. Investing and managing money is often the same. Utilizing a guide for your financial management can help you arrive at your safe harbor and avoid the treacherous shallows along the way.
If you have yet to begin your financial journey, that’s ok: there’s no time like the present to start! As you navigate your personal finances, we hope these concepts can help you find your way out of the shallow waters. If you have any questions along the way, let us know!