What life is the plan for?

On 27 October 1993, Warren Buffett spoke to graduate students at Columbia Business School. Asked how he evaluates investments and risk, he talked about the Washington Post Co. around 1973: a business he could understand, run by honest and able people who had a significant part of their own net worth in it. Then came the short line: “Risk comes from not knowing what you're doing.”

He wasn’t arguing against saving, and he wasn’t passing judgement on market charts. The line separates two things that are easy to run together: the pressure to pick a long-term plan now, and the question of whether you understand what later life that plan is supposed to pay for, and what you would be tying yourself to.

In retirement planning this becomes a very personal question. A projection with €130 a month and a larger figure later looks calm enough. The harder part comes before it: what kind of life do you actually want to keep within reach? Think of where you live, the pace you want to live at, how close you stay to the people who matter, and how much slack you leave for the unexpected. And have you ever put a name to the gap between what you are likely to have and what you would want? Without that, a plan can easily turn into a contract about something you haven’t really understood.

This isn’t a conversation about products yet, and the figures here are not a calculation for you. The question is whether you are choosing a plan before you know what it is for. CapitalPath deliberately starts with orientation: understand first, then decide.

Nora is 39 and has a salaried job. It is Wednesday evening, and two pages lie on her kitchen table: €130 a month at the top, purely as an example, and a larger figure at the bottom. An acquaintance’s advice is still ringing in her ears: “Just get started. It doesn’t matter what you pick, as long as you do something.”

Nora means to set up the standing order tomorrow. Then a much simpler question stops her: which later life does she actually have in mind? She has never put into words the gap between what she will probably have and what will matter to her later. She can’t say what on the pages is an assumption and what would be binding, or how easily she could get at the money if life felt different in five years’ time.

When the acquaintance messages the next day to ask whether she has finally started, Nora replies: “Not yet. First I want to work out what kind of life I’m saving for, which gap I haven’t understood, and what I’d be committing to before I even know what I’m doing.”