Determining Your True Values Will Lead to a Successful Financial Strategy
“We want to retire by the time we reach 60!”
“It’s vitally important to send our kids to the college of their choice!”
“I want to quit my job and do something else!”
“We want to buy an apartment in the city!”
We all have dreams. We have those ideas that swim in our minds and create endorphins to rush through our bodies. The hurdle we frequently struggle to jump over is our ability to take those ideas and put them into action.
Lisa and Mark, both in their early 40’s, had been working hard to build their net worth. They lived carefully and thoughtfully, funding their retirement plans and living comfortably within their means. They knew how to save their money for a secure future. When we sat down to talk about their planning goals, the following conversation took place.
Lisa began, “You know, I like my career and the financial rewards it provides, but I’d really like to do something else or work part-time.”
Mark answered, “Yeah, but without your salary, I don’t know if we’ll be on track to pay for college and be able to stop working before our mid-60’s. And we also talked about summer camp for Hilary. It all costs money.”
Lisa looked dejected but offered, “I know. I just feel so torn…”
These conversations are normal. We all have that idea that magnetically draws us like a compass pointing north.
The question is, what is your truth? What is that one idea that, if not attained, will create disappointment or regret?
Determining our true values is a process of thoughts, discovery, conversation and finally an agreed-upon strategy. Lisa and Mark’s assignment was to go home, talk about their prior discussion, and consider what underlying values became clearer and more defined.
Several weeks later, Lisa and Mark returned to reveal the outcome of their conversation.
“Mark and I invested a lot of time talking about this, and I believe we’ve developed our most important values. We decided that while Hilary’s education is very important, we have agreed that unless she earns scholarships, her choices will be limited to state schools. We also expect her to contribute to her school’s tuition. While I would love to change my work situation, we’ve agreed that I will continue another five years and then transition to part-time so we can save more money for our future. We really want the option to make significant life changes in our early 60’s. Can you help us determine whether that’s possible? We value the idea of changing our lives as soon it is practical and rational.”
In summary, Lisa and Mark’s highest priority and greatest value is retiring in their early 60’s. This decision affects their big-picture core values as well as their everyday smaller values, such as the following:
Lisa and Mark made some budgeting choices that helped put them on the path to achieving their most important goal. These choices included decreasing childcare costs by choosing a less expensive option, shaving 25% off their annual vacation budget, cutting 15% off their other discretionary spending, keeping their cars for 8 to 10 years and increasing their deductibles and co-insurance on their insurance plans to save on premiums. They explored other cost-cutting ideas like cutting out cable TV and replacing paper goods like power towels and napkins with cloth.
Incremental shifts in spending, along with careful monitoring, supported Lisa and Mark on their mission to live their highest values. It’s the smartest place to start when planning your life, and the answer is your life’s most satisfying goals.
A Skill for Advisors to Master to Keep Clients for Life
There's one key approach that makes you invaluable to your clients so they want to stay with you for the long-term.
You have to genuinely be interested in people.
Click the image above to watch the video!
- 1 of 892