couple-climbing-a-mountainLet’s take a few min­utes to dis­cuss per­son­al finan­cial plan­ning – or as we call it Pros­per­i­ty Plan­ning™.  When we take a step back for a minute it is quite aston­ish­ing to think of every­thing we plan for.  We make plans for din­ner, lists for the gro­cery, and sched­ules for kitchen duty at the office.  Kids even have what are called “play dates”, or a struc­ture pre-planned time to play with some­one.  Regard­less of how hard we desire to break loose from struc­ture, it is always upon us and often growing.


We live in a world with such plan­ning and struc­ture, yet we tend to for­get or ignore some of the most impor­tant plan­ning of all – our finan­cial future.  Stop and ask your­self these three questions:


  • What goal requires me to need the lev­el of salary that I am receiving?
  • What goal requires me to be plac­ing $X.00 into my 401(k) and IRAs each month?
  • What goal should the risk on my invest­ment port­fo­lio ulti­mate­ly be lead­ing to?


Chances are you, like many oth­ers strug­gled to answer at least one if not all of those three ques­tions.  With­out a goal or a stan­dard of mea­sure­ment it is more chal­leng­ing to earn, save, and deal with risk.  Per­haps you are actu­al­ly sav­ing more mon­ey than nec­es­sary for your future and could go to a less­er pay­ing career in the field that you real­ly love.


The ques­tions you ask your finan­cial advi­sor and the ques­tions he or she asks you should empow­er and cre­ate under­stand­ing.  Nev­er enter into an invest­ment pro­gram with­out under­stand­ing why and how that pro­gram is good for you.  Like­wise, a good finan­cial advi­sor should be very skep­ti­cal about tak­ing on clients who are not will­ing to dis­close their goals and finances.  Most of us will admit that the choic­es we made in the past got us to where we are today.  Shouldn’t the choic­es we make now get us to where we want to be tomorrow?


Tak­ing the ini­tia­tive to begin explor­ing your finan­cial future should start ear­ly, as it will also bring you greater con­tent­ment with your life now.  The ques­tions you or your advi­sor ask your­self should have very lit­tle to do about asset allo­ca­tion, stocks and bonds, or risk.  This process is about you and your fam­i­ly, not mar­ket rel­a­tive invest­ment returns.  Con­sid­er these three questions:


  • How much mon­ey will enable me to live a hap­py retire­ment and am I sav­ing enough to get there?
  • Can we build the lake­house when retire?
  • Would my child’s col­lege still be paid for if began to take pilot’s lessons next week?


Ques­tions such as these give answer and mean­ing to the process of accu­mu­lat­ing wealth and achiev­ing a sense of per­son­al pros­per­i­ty.  If you are going to save mon­ey in your 401(k), shouldn’t you know exact­ly how much you should be sav­ing?  Our lives are full of choic­es, each accom­pa­nied by their own oppor­tu­ni­ty costs.  Aside from the super-afflu­ent, many of us will find that there are trade­offs to be decid­ed upon.  By going “goal shop­ping” you can deter­mine what things are impor­tant to you.  Would you retire 2 years ear­li­er than expect­ed if it meant you had $5,000 per year less spend­ing mon­ey dur­ing retire­ment?  Some peo­ple would jump at that oppor­tu­ni­ty while oth­ers would quick­ly say “No Way”.


To suc­cess­ful­ly devel­op such goals and dreams, you should start as ear­ly as pos­si­ble, or at least pri­or to retir­ing.  As an exam­ple let’s look at John and Mary Smart.  While they made choic­es about their life, they worked with an advi­sor to deter­mine the impact of their choic­es on their finan­cial future.  This means they know with good prob­a­bil­i­ty that their plan will suc­ceed, how­ev­er they also know that they aren’t sac­ri­fic­ing too much today, such as vaca­tion mon­ey or any of the things that they like doing today.


John and Mary are indeed smart, as they know exact­ly how much mon­ey they are work­ing to accu­mu­late, how much they need to save to do it, but more impor­tant­ly what that mon­ey will mean for them in 10 years when John and Mary are retired.  They enjoy sav­ing mon­ey and stay the course because they know exact­ly what kind of retire­ment life it will afford them to have.  They know what is impor­tant to them!


Like John & Mary, you only have one life to live and it should be filled with an abun­dance of joy, suc­cess, and pros­per­i­ty.  You prob­a­bly relent­less­ly plan out what’s for din­ner this week, or what day you are going to run your errands, so take the effort and plan out what you want for your­self and your fam­i­ly.  The process will shine a light of under­stand­ing on the finan­cial choic­es you make.  By tak­ing a few min­utes to day­dream about what your future looks like, and you will have tak­en a much need­ed step towards a wild­ly pros­per­ous future!