Steven Covey, in his excellent book Seven Habits for Highly Effective People, uses a simple graphic to categorize activities.  All activities can be categorized as important or unimportant, and urgent or not urgent.

Dwight D. Eisenhower (quoting J. Roscoe Miller) once said in a speech, “The urgent are not important, and the important are never urgent.” Thus, this paradigm has come to be known as the “Eisenhower Matrix.”

Important is self-explanatory, but urgent may not be.  Things that are urgent have some immediacy to them.  For example, going to see a relative who has just been rushed to the hospital or responding to a new social media post.  They both have a quality of immediacy, of something to be done “now”, but the difference obviously is that the first is important while the second is not.  If an activity can be delayed without immediate consequence, it is not urgent.  For example, most people would say getting their finances in order is important, yet they never get around to doing it.  It can be delayed and procrastinated indefinitely – there is no sense of urgency that leads to doing it NOW.

Every activity can be placed in one of the four quadrants as follows:

	Urgent	Not Urgent
Important	I	II
Not Important	III	IV

Mr. Covey makes the point that while everyone does quadrant I activities first (both Important and Urgent), effective (i.e. successful) people do quadrant II activities next (Important yet Not Urgent) while ineffective people spend their time on quadrant III (Not Important yet Urgent).  Everyone generally avoids quadrant IV successfully (Not Urgent and Not Important).

Remember, the key to success is to do more quadrant II activities, by using time and energy freed up by dispensing with quadrant III activities.  Here are some examples of some financial planning activities and where people would typically place them:

Quadrant I (Important and Urgent)

• Preparing tax return before April 15^th deadline
• Going to work every day
• Contributing to IRA(s) before April 15^th
• Signing up for employee benefits before the end of the enrollment period

Quadrant II (Important and Not Urgent)

• Buying insurance (life, disability, etc.)
• Increasing 401k contributions
• Doing estate planning (wills, durable powers of attorney, etc.)
• Implementing a financial plan/investment strategy
• Sending referrals to your friendly neighborhood financial planner (sorry, couldn’t resist)

Quadrant III (Not Important and Urgent)

• Checking what the market is doing today
• Watching talking heads on CNBC
• Attempting to identify (in the words of popular investment blogs, etc.) “Top 10 Stocks to Buy NOW!”

My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Winter 2025

We do not sell property and casualty insurance (auto, homeowners, etc.) but we review it because inadequate insurance could thwart the best of investment strategies.  This month I will focus on an oft-neglected corner of financial planning and give you a few tips on that most boring of topics, your property and casualty insurance.  The following are what I consider the three most common mistakes individuals make in this area:

Having deductibles that are too low.  Many people are carrying deductibles on their vehicles and homes that are far too low.  Many people carry $250 or $500 deductibles because that is the level they selected years or decades ago, and they have never changed the amounts.  Individuals for whom a few hundred dollars of increased expenses in an accident would be a problem have far more serious and fundamental financial issues than determining their optimal deductible.  For the rest of us, there are three reasons to consider raising deductibles:

1)  Small insurance claims can lead to higher rates or non-renewal of coverage.  This is becoming increasingly true for homeowners coverage.

2)  Premium savings can be substantial.  In many cases you can “save” the amount of the increased deductible in just a few lower premiums.  Remember there is no such thing as a free lunch.  Insurance companies price their policies to cover their costs including overhead to process claims.  If you raise your deductible, you save them processing costs on small claims and signal through your willingness to assume some of the risk that you may be a less costly customer overall.

3)  Hassles are reduced.  In the case of a small problem, you can just handle it (or not) at your discretion and leisure, without having to deal with filing a claim.

Failing to carry umbrella liability coverage.  Many people with substantial assets to protect fail to secure a personal liability policy.  There are three reasons to consider one:

1)  A personal umbrella policy is generally very inexpensive (generally only a few hundred dollars per year per million dollars of coverage).

2)  Insurance companies won’t write an umbrella policy if the underlying insurance you carry is inadequate.  By getting an umbrella policy you are “forced” to increase your underlying coverage to acceptable levels if they aren’t already.

3)  Given the low costs, in today’s litigious society do you really want to be without it?

(See Umbrella Coverage for more on how to select the appropriate amount.)

Carrying medical payment coverage.  This is not coverage for other people – they are covered by the liability section of your policy when you are at fault.  Medical payment coverage is for you or your family.  There are two reasons to drop this coverage:

1)  Obviously, your premium will be lower without it.

2)  If you have adequate health insurance coverage, it is redundant.  If you do not have health insurance, you will need this coverage, but you have a larger problem – you need health insurance!

By reviewing your coverage with your agent and avoiding these three common mistakes, you may well be able to both decrease your risks and save money simultaneously.

I wrote the following to our clients the morning after the election, but thought it was worth sharing more broadly here:

All,

Last night and this morning as I watched and thought about the election results, I was reminded of a Chinese parable from the second century BCE.

Here is the translation of the fable from wiktionary:

It can be difficult to foresee the twists and turns which compel misfortune to beget fortune, and vice versa.

There once was a (father), skilled in divination, who lived close to the frontier (with his son). One of his horses accidentally strayed into the lands of the Xiongnu, so everyone consoled him.

(But) the father said, “Why should I hastily (conclude) that this is not fortunate?”

After several months, the horse came back from the land of the Xiongnu, accompanied by another fine horse, so everyone congratulated him.

(But) the father said, “Why should I hastily (conclude) that this can not be unfortunate?”

His family had a wealth of fine horses, and his son loved riding them. One day (the son) fell off the horse, and broke his leg, so everyone consoled (the father).

(But) the father said, “Why should I hastily (conclude) that this is not fortunate?”

One year later, the Xiongnu invaded the frontier, and all able-bodied men took up arms and went to war. Of the men from the frontier (who volunteered), nine out of ten men perished (from the fighting). It was only because of (the son’s) broken leg, that the father and son were spared (this tragedy).

Therefore, misfortune begets fortune, and fortune begets misfortune. This goes on without end, and its depths can not be measured.

Some of you are undoubtedly pleased with the election results (you believe it is fortunate), others despairing (you believe it is unfortunate), but either way I think the fable is apt. We simply don’t know yet if, in the long run, the outcome was good or bad.

Subsequently, the market seems pleased with the election results. Tax cuts (or simply extensions of previous cuts) and deregulation are expected and would be good (in my opinion). The deficit/debt, as well as the funding of Social Security and Medicare, will be an issue at some point but politicians (on both sides) are happy to let it be someone else’s (larger) problem later. The primary (economic) danger in the short run is probably restrictions on the free flow of goods (tariffs) and people (immigration) – if taken too far.

It has been particularly hard lately to infer policies from what politicians say. They (again, on both sides) seem to just say anything to get elected even if they have no intention of following through (or, less charitably, are simply lying). Thus, we don’t know exactly what is in store for the country. For example, I expect the promises of no taxes on tips, overtime, Social Security, etc. to be very quickly memory-holed. Despite this, I am not particularly concerned (I’m always a little concerned!) at the moment and all of our client’s portfolios are very well diversified.

If you have any specific questions (or simply need to talk), of course, we’re happy to answer them (or listen).

My latest quarterly ramblings to my Financial Professionals list are out: Financial Professionals Fall 2024