In essence, the greatest human fear is that of the unknown. We would prefer to see something ugly in plain view than to feel and see the nothingness of the dark -- and often the picture painted by one's imagination is an extended and magnified version of whatever emotion one is currently experiencing.
For example, in "bad times," as we are experiencing now, one's imagination will likely fill the empty spaces of information (unknown) with extreme pessimism and horrific images. Similarly, in "good times," one's imagination will likely fill in any existing empty spaces with over-confidence and positive images.
This is why financial planning is especially crucial in extreme conditions.
"All human situations have their inconveniences. We feel those of the present but neither see nor feel those of the future; and hence we often make troublesome changes without amendment, and frequently for the worse." ~ Benjamin Franklin
Because of the weight of our feelings in the present moment, the path upon which we place ourselves for the future is often misguided. How many people three years ago imagined (and planned) to reach a
financial goal, such as retirement, by this year, 2009? I am confident there were many. Of course, not
many people (or financial planners) in 2006 likely imagined a generational decline in financial
markets and a reduction of net worth by fifty percent by 2009; however, I am confident that many people (and financial planners) were incorrectly assuming that the "good times" would continue perpetually into the future.
By the same reasoning, how many people today are imagining the next three years will be dramatically better than the last three? How many people today do you think are imagining bright futures ahead of them? Probably a lot less than three years ago.
"Plans are worthless. Planning is essential." ~ Dwight D. Eisenhower
A static plan in a dynamic environment can lead you right over a cliff. Prudent financial planning, however, is a dynamic and evolving process, which is crucial in a dynamic environment and, metaphorically speaking, is the light that shines on the truth amidst the darkest corners of our imagination. This is why financial planning is so crucial, especially in extreme conditions, when one's imagination is most likely to see something that is unlikely to transpire. As challenging as these economic times may be, it is arguably better to see absolute ugliness in plain view than to allow your imagination to fill in the scenes of absolute darkness and uncertainty with images that may be worse than reality.
This is the beauty of ugliness -- an ugly reality is preferable to an even uglier picture painted by your imagination.