The Importance of a Vision (and Not Goals) in Financial Life Planning
He told me, “I want to educate my children and retire at 65.” That answer, or some version close to it, is what I hear every day when I ask my clients what they would like to accomplish with the rest of their lives. They usually answer me by citing a goal. It makes sense, haven’t we all been taught that it’s important to have specific goals?
However, even worthy goals have limitations. Goals do not motivate. Goals do not inspire.
Merriam-Webster defines a goal as “the end toward which effort is directed”. Notice that there’s no mention of creativity or greatness. With goals there’s no sense of “dreaming big,” or dreaming at all for that matter. Goals carry with them a weighty sense of obligation and are often dictated by society’s conventional definition of “success”. It’s no wonder that many find financial planning as a means to an end. Instead of enjoying the process, it ends up being a mundane series of steps you take to check all the boxes on your financial planning to-do list.
When you take the time to answer a simple question, creating your financial plan will fill you with eager anticipation for the future.
Let’s take my client who wanted to retire at 65 as an example. I asked him, “Why do you want to retire at 65? Why do you want to educate your children?” In answering those questions, he saw that making connections with his family and leaving a legacy were the “why” driving his desire to retire. For him, retirement meant creating experiences with his children and grandchildren and teaching them about philanthropy. That detailed vision made his approach to savings more meaningful and tangible than the traditional method, that just looks at his retirement expenses as a function of current expenses and then calculates what he needs to save in order to create that cash flow. Hardly motivating!
Your vision, not your goals, should drive your plan.
Try asking yourself “why” when it comes to your financial goals. You’ll find it gives you permission to go beyond the standard answers of “educate and retire” and really tap into what you truly desire for yourself. Until you achieve this insight, there’s a disconnect between your goals and your fulfillment. On the other hand, when your vision is so detailed that you can see it, feel it, hear it and taste it, you’ll be motivated to take action and enjoy the journey.
What I’m describing is a very results-oriented approach called financial life planning. I’ve seen time and time again how clients who use this approach leave the office excited to implement their plan. Not only have they clarified their values and vision, they also have a clear roadmap on how to get there.
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