Imagine you’re at the track for a test day, run through your checklist and everything is good to go, you put down a couple hot laps & notice you’re off the pace. How do you know what to adjust to fit your driving style?
Drivers and their teams rely on something special to keep their car performing at its best: telemetry. These systems send data from the car to the team, showing everything from speed to engine temperature. With this information, the team can make decisions that might help the car win the race.
Now, let’s move away from the racetrack and into the world of financial planning. Here, people also want to be at their best—not in a race, but in life. They want to ensure they have enough money for the things they need and want, both now and in the future. To help with this, financial planners use tools to collect & analyze the clients data to build plan. The tool I use is called The Living Balance Sheet® (LBS). Like the telemetry system in a race car, LBS collects and shows important data, but instead of tracking car performance, it tracks money, debts, savings, and more.
Even though one is about cars and the other about money, these two systems have a lot in common. Let’s see how they work and why they’re so important.
Gathering the Data: Knowing What’s Going On
On the racetrack, every second counts. The telemetry system sends data from the car to the team in real-time. If the engine is getting too hot or the tires are losing grip, the team knows immediately and can call the driver in to make adjustments. This real-time data is the difference between winning and losing.
In the financial world, The Living Balance Sheet® works similarly. It collects information about a person’s finances—how much money they have, what they owe, what they’re spending, and how they’re saving. Just like the telemetry system, LBS updates this information in real-time. If someone isn’t saving enough or is lacking the proper insurance coverage, their advisor can see it right away and make changes to stay on track.
Making Sense of the Data: Clear and Simple
Telemetry systems don’t just throw a bunch of numbers at the team; they organize the data in a way that’s easy to understand, like graphs showing speed or charts comparing tire pressure. These visuals make it easier for the team to see patterns and make quick decisions, like planning a pit stop before the tires wear out.
The Living Balance Sheet® does the same thing for finances. It organizes financial data into four main areas: Protection (like insurance), Assets (like savings), Liabilities (like loans), and Cash Flow (how money comes in and goes out). By looking at these areas, a person can easily see where they’re doing well and where they might need to improve. By working with your advisor they can build models and show how changes to your plan will impact the various parts of your balance sheet.
Adjusting the Strategy: Staying Ahead of Problems
In racing, telemetry data helps teams stay ahead of problems. If they know that tires usually wear out after 20 laps, they can plan a pit stop at lap 19 to avoid losing time. They can also use data to plan their race strategy, deciding when to push the car to its limits or save fuel.
In financial planning, the Living Balance Sheet helps people do the same with their money. By looking at their financial data, they can see potential problems before they happen. If someone sees they’re spending more than they’re earning, they can cut back on expenses before they run out of money. The LBS also allows people to plan for the future, like saving for a big purchase or retirement.
Working Together: The Power of Teamwork
In both racing and financial planning, having the right data is important, but so is having the right people to interpret that data and make decisions. In racing, the telemetry system helps the team of engineers, strategists, and the driver work together to make the car as fast as possible. Each person brings their own expertise to the table.
In financial planning, The Living Balance® Sheet helps a person and their financial planner work together similarly. The planner brings experienced knowledge about money, while the person brings their goals, concerns, and dreams. Together, they use the data from the LBS to create a plan that helps the person achieve their goals & reduce stress about the unknown.
The Finish Line: Achieving Success
At the end of the day, both telemetry systems in race cars and The Living Balance Sheet® in financial planning are about one thing: winning. In racing, that means crossing the finish line first. In financial planning, it means reaching your goals and living the life you want. Both systems give you the tools to make smart decisions, avoid problems, and stay on track.
So whether you’re a pro driver or a motorsports enthusiast, the lessons are the same. Pay attention to the data, make smart decisions, and work with the right people. With the help of systems like telemetry and The Living Balance Sheet®, you can be confident that you’re on the right track to success.
Interested in seeing your financial telemetry?
Here is a link to get started with The Living Balance Sheet https://www.livingbalancesheet.com/lbsVision/lite/ElliottEllis
Disclosure:
The Living Balance Sheet® and The Living Balance Sheet® Logo are service marks of The Guardian Life Insurance Company of America® (Guardian), New York, NY. © Copyright 2005-2024 Guardian.
Elliott is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Alliance Financial Group is not an affiliate or subsidiary of PAS or Guardian. 7057106.1 Exp 9/26
Author: Elliott Ellis
I help drivers and their families minimize financial risks in an inherently risky business.
