Minecraft and Financial PlanningSubmitted by AtwoB (Point B Planning, LLC) on February 1st, 2018
My sons are obsessed with Minecraft. If you’re unfamiliar, Minecraft is a game where you can build almost anything out of pixelated blocks that look like they came out of the age of Atari. While I gave up on video games years ago, when they became way too sophisticated for my simple mind (why play Madden on Playstation when I can just use Bo Jackson in Tecmo Bowl and steamroll my way to victory!), there is something quite endearing about a game that looks so basic yet allows its user to be infinitely creative. And the proof is in the pudding; Minecraft is a global phenomenon that was recently purchased by Microsoft for $2.5 billion!
As I recently watched my son deftly navigate the game and build his world of the day (screen-time is an issue that we have yet to grapple appropriately with), it made me realize that the game wasn’t all that different from the process of financial planning and investing. In fact, the way that our kids play Minecraft could go a long way in helping us think about the right approach to financial planning.
Mining and Managing Resources
If you want to build something in Minecraft, you need to patiently “mine” resources that allow you to create your world. If your desired world is quite simple, it may not be tough to accumulate the necessary materials (wood, stone, etc.) to build what you would like. But if your Minecraft creations are more complex, it will take the right combination of tools, accumulated resources, patience, and focus to build something more substantial for the future. Financial planning is no different.
In its most basic form, financial planning is about setting goals that align with our values, assessing our resources, formulating a plan, and implementing the plan using what’s available to us. A financial plan simply balances the goals of the present with those of the future, using our finite resources. Do you value traveling with your kids today (while they can still stand us!) above retiring three years earlier? Is the cost of buying your “dream house” today worth not saving as much for college? There isn’t a right or wrong answer, but the financial planning process provides a framework to assess these tradeoffs and spend/invest our money in ways that best align with our values. How we plan to save, invest, and spend our money is the real world equivalent of our kids deciding how to mine and store resources to create their ideal “Minecraft” world.
Creative or Survival?
Minecraft is played in creative or survival mode. Creative mode allows the player to build a world of their choosing without anything to worry about. Let your imagination run wild and build! Survival mode, however, forces the player to grapple with some obstacles along the way, some of which can be a little scary. In “survival” mode, users may have to fend off mobs, monsters, and other creatures. Ultimately, however, the goal is the same; overcome those obstacles and build the world of your choosing.
In real life, we’re all forced to deal with barriers and resource constraints as we navigate our day-to-day finances. Our very own "survival mode" you can say. But daily “survival” tactics (paying the bills, getting the kids to soccer practice, making tomorrow’s lunch) need to be counterbalanced with the bigger picture, “creative” aspects of our lives. People often approach the thought of financial planning with a “survival” mindset. They focus on constraints that may be imposed by the process or the obstacles to overcome. This mindset and the upfront work necessary to build an effective plan can be a turn-off for many. So, it can be easy to avoid creating a plan altogether.
The real focus, however, should be on the “creative” - the goals you’re looking to achieve and how to go about doing so. In reality, the process of financial planning and the initial effort put into it, should make life less restrictive, more enjoyable, and allow you to relax – not the other way around. With a good plan in place, building your world will be about ongoing maintenance. With no plan in place, “survival” may consume more of your time and money than necessary. Even with a good plan, there will inevitably be some “survival” moments and adjustments that need to be made along the way. But as in Minecraft, the end-goal is to build the “world” that you appreciate most. Make this the focus of your plan, and the process will not be intimidating at all - it will be liberating.
So take a cue from the kids. Get creative, layout your strategy, “mine” and apply your resources effectively, and build your ideal world.