Friday, April 28, 2006

Five-Year Plans

My friend, Jay Schwarm, started talking about Five-Year plans 20 years ago when he took a promotion that moved him from Houston to Chicago. He was working a series of five-year plans to get him to early retirement. It was Jay's theory that as we get older that we probably can't make realistic plans more than about five years out.

The concept of a Five-Year Plan was developed in 1928 by the Communist Party in the USSR as a series of centralized plans to promote rapid economic development. Sometimes they were fulfilled early and sometimes they weren't fulfilled at all. The term "Five-Year Plan" has always had a very Communistic ring to it to me who grew up in the Cold War.

While I was in the business world, we periodically made Five-Year Forecasts.

Five-Year Forecasts = Capitalism
Five-Year Plans = Communism
Semantics? Well, sort of. Might be debatable based on who is doing/enforcing the planning/forecasting

For a while I thought Jay's Five-Year theory wasn't that great an idea but when we bought our house in Mexico suddenly we found ourselves using a Five Year Plan. The economics of buying here was based on some financial planning with a.....Guess what?.....a Five Year Plan. We are now about 4-1/2 years into that five year plan.

The plan was that we would buy the house, live in Mexico four or five months of the year and then rent it out to cover the cost of maintaining the house. Since we had rented houses in San Miguel for a month of so at a time, it would be nice to know we were always going back to the same place, our place, and I would have the opportunity to decorate and have "my stuff" around me. Well the plan worked great for the first two years but by the third we found that we didn't like having renters and wouldn't you know, they would have rented the house six months earlier and suddenly we wanted to be in our house but the renters were occupying our space.

In the fourth year we realized that we didn't just want to be able to come anytime, but we wanted to be here all of the time. Well this just didn't jive with the five year plan because part of the the original five year plan was that at the end of five years we would probably have enough of San Miguel or maybe our health situation would have changed and we would be ready to sell it and move on.

For the last six months we have been working on a new Five year plan. Selling the house in Houston and living in San Miguel full time are a part of the New Five-Year Plan.

Maybe Jay was on to something 20 years ago and I'm just now catching up.

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