The importance of Bimodal Financial Planning strategies cannot be discounted. It is for any person or family wanting to succeed in the current economic environment. Ensuring you are taking care of your day-to-day financial life and planning for your future provides a robust Bimodal Financial Plan.
Doesn’t that sound exciting and fun? What do I mean by a Bimodal Financial Plan? If you asked that question, give yourself a gold star🌟. The first time I heard it, I thought they were talking about Bipolar psychological problems, but no, folks meant Bimodal.
In mathematical terms, Bimodal is:
Adjective: having or involving two modes, in particular (of a statistical distribution) having two maxima.
What the heck does that have to do with financial planning? Well, right now, I am making this stuff up; however, the term Bimodal is the new Buzzword where I work in terms of IT (computer stuff) quoted by Gartner (the folks who create these lovely concepts). For them, the definition of Bimodal becomes more literal:
Having two modes of operation (typically in computers: (1) Day to Day Support (2) Long-term evolution and planning.
Doesn’t that fit into financial planning like a hand in glove? Everyone is always taking care of the day-to-day bill paying and making sure they stay out of debt, and most of us also are planning for our Long-Term financial self, hence the most excellent new financial term Bimodal Financial Planning.
Bimodal Financial Planning is Really?
Stripping away the jargon part of this, it is a sound idea for planning your financial life:
- Take care of today’s problems financially, in terms of paying off bills and debts.
- Plan for your future including: Emergency Funds, Vacation Funds and ultimately Retirement Planning
If any folks are dealing with financial advisors or planners, ask them about their Bimodal Financial Planning Solutions to plan your financial future and see how they react to that catch-phrase. See if they start using it themselves without asking for an explanation (that is a bad sign, they should ask for what you mean by that before they start using it in conversation).
Never let anyone use a term (especially a financial term) that you don’t understand without asking for an explanation. If they can’t explain it to your satisfaction, it is either (1) too complicated and shouldn’t be used or (2) the person you are talking to is bluffing their way through things (and that is very bad as well).
Think, I am doing it without realizing it is bimodal financial planning.
I think a lot of people are.
I find people deal with some one for investments because its interesting and RRSPs save tax so they are motivated but they tend to neglect the short term cash flow and disaster planning.
I use Maslows hierarchy of needs to refocus people.
I actually say in my engagement agreement you have to ask questions , its a partnership. Videos and writing summaries for clients helps. People don’t always tell you they don’t understand and even when they do its a lot to recall later .
I am grateful for the time I spent as a trainer for Prudential in my 20’s it helps
I believe, most of your readers are working on this Bimodal financial planning. I know I am doing that.
Totally true. You’ve got to be able to plan for how you are going to be paying for expenses like rent groceries etc TODAY, through working(for most of us), and how will you pay for them in the FUTURE when once you retire on a beach(hopefully) or your paid off house. I guess it really is just a catch-phrase for short and long term planning.
And I totally agree, when working with any kind of adviser or consultant, if you don’t know what they are talking about, always ask them to explain it, and if they cannot do so very well, be worried!
If Mr. Buffett says, “Invest in what you understand”, I will listen. If you don’t understand a financial concept, do not bluff your way through it, it is your money, you must understand it.
I think pay for mutual fund salespeople is bimodal by this definition. They get paid a chunk of your money up front, and they get paid trailers over the long run.
Very true, and there are twin maxima as well!