3157: The 3 Most Important Words in Financial Planning by Erik Carter of Financial Finesse

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🗓️ 27 May 2025

⏱️ 11 minutes

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Summary

Discover all of the podcasts in our network, search for specific episodes, get the Optimal Living Daily workbook, and learn more at: OLDPodcast.com. Episode 3157: Erik Carter underscores how embracing a margin of safety, a buffer against unpredictability, can transform your entire approach to financial planning, from investing and retirement to insurance and emergency savings. By preparing for less-than-ideal outcomes, you reduce financial stress and increase confidence in your long-term goals, all while building a more secure path to financial freedom. Read along with the original article(s) here: https://www.financialfinesse.com/2013/09/05/the-3-most-important-words-in-retirement-planning/ Quotes to ponder: "A margin of safety gives you room for error to be wrong." "Entering numbers into a retirement calculator that are overly optimistic will produce a case of the old garbage in, garbage out." "You also don’t want to assume an average life expectancy. After all, there’s at least a 50% chance that you’ll live past average." Episode references: Fidelity Retiree Health Care Cost Estimate: https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs Stocks for the Long Run by Jeremy Siegel: https://www.amazon.com/Stocks-Long-Run-Definitive-Investment/dp/0071800514 Learn more about your ad choices. Visit megaphone.fm/adchoices

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1:04.7	most important words in financial planning by Eric Carter of Financial Finesse.com.
1:17.0	According to an article by The Motley Fool, the three most important words when it comes to investing are the margin of safety. The article discusses how inaccurate people tend to be at
1:23.9	making predictions about things like the economy, industry trends, and business growth.
1:29.6	Since this unpredictability can wreak havoc on investment plans, many of the top investment experts
1:36.2	recommend investing with a margin of safety, which is, quote, simply the distance between your
1:42.8	predictions coming true and needing those
1:45.8	predictions to come true. You can try to predict the future, but a margin of safety gives you
1:51.7	room for error to be wrong, end quote. In other words, rather than pick the investment that needs
1:57.8	to grow at 10% per year to pay off. Pick the one that could grow at 10%,
	...

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