Determining Your True Values Will Lead to a Successful Financial Strategy

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.

Michael Kay
Advisor
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I founded Financial Life Focus because I wanted to work with people who put your success at the forefront of everything they do; people who understand that finding balance is ... Click for full bio

Most Read IRIS Articles of the Week: April 17-21

Most Read IRIS Articles of the Week: April 17-21

Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, April 17-21, 2017 


Click the headline to read the full article.  Enjoy!


1. Market Keeping You up at Night? Look for the Right Hedge


Like so many others in the industry, I was wrong. For years, I was certain that the bull market was nearing its end. I thought the market was over-extended, and that, surely, the wild equities run was coming to an end. But everyone else was bullish, and perhaps rightfully so. And while I’ve watched equities continue on their spectacular rise, I do think now is the time (really!) to put a hedge in place. Here’s why. Here’s how. — Adam Patti

2. How to Manage Bond Market Pain and Seek the Gain When Rates Are Rising


The realities for fixed income investors have changed. How is this being reflected in markets? Bond investing has become increasingly difficult over the past decade. Markets have been heavily distorted by ultra-low interest rates and quantitative easing, as well as by extreme risk aversion in response to the global economic crisis and the eurozone debt crisis. — Nick Gartside

3. Seven Reasons You'll Fail as a Financial Advisor


Is being a financial advisor worth it? I am an optimistic person and I encourage other people to keep a positive mental attitude (shout-out to Napoleon Hill and W. Clement Stone). However, by taking a good, hard look at the negatives in life, we can successfully pivot towards the positive aspects that will help us achieve our goals. — James Pollard

4. The Secret to Turning Every Prospect into a Client


How do you treat one of your most valued, existing clients? Here’s a list of some things that come to mind. — Andrew Sobel

5. Why Do Clients Change Advisors?


According to many advisors I speak with, the only clients that leave are those who have died. And while attrition may not be a big problem in this industry, I have to assume that at least a few clients change advisors without doing so via the funeral home. — Julie Littlechild

6. Why You Should Focus on Getting Referral Sources


I was talking with an advisor last week about how to get into conversations about what he does. He was relaying the story of going jogging with a friend who could be a good client but is, more importantly, connected to a large network of people who fit this advisors ideal client description. — Stephen Wershing

7. How Big Picture Thinkers Seize More Opportunities in 7 Steps


Big picture thinkers are not unicorns - rare and mystical. And they were not born with the innate ability to think big. They do, however, pay attention to the broader landscape and take the time to think, analyze and evaluate. — Jill Houtman and Danny Domenighini

8. 5 Actions to Build Your Reputation


Your reputation is who you are and how you show up, Monday to Monday®.  Many of us take our image and reputation for granted.  Give careful thought to the kind of reputation that you would be proud of Monday to Monday® and that would resonate with your purpose and priorities. — Stacey Hanke

9. How Are You Poised to Begin Welcoming GenZ to Your Workplace?


The generational changing of the guard is a fact of life as old as time. Young replaces old in responsibility, importance, control and culture. Outside of the family, the workplace is perhaps where this is seen most regularly by most people. — Shirley Engelmeier

10. Are Price Objections REALLY Price Objections?


Next time you hear your prospects give you price objections, it’s not because of the price. The give price objections because they don’t know the full value proposition that they’d be paying for. And it’s not based on their need, or your features and functions. It’s based on the buying criteria they want to meet internally. — Sofia Carter

11. Understanding the Economic Value of Transition Deals


Last week we wrote about the economic rationale behind going independent vs. moving to another major firm as an employee. As a follow-up topic, we thought it prudent to analyze transition packages attached to big firm moves and peel back the layers of the onion to show the components of these deals. — Louis Diamond

Douglas Heikkinen
Perspective
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IRIS Founder and Producer of Perspective—a personal look at the industry, and notables who share what they’ve learned, regretted, won, lost and what continues to ... Click for full bio