Let’s start with a question, “How much is enough?”
- for a college education or three?
- for a retirement by design and not default?
- for giving to children or grandchildren including charities important to you now?
- for your short term priorities and goals that are quickly approaching?
Here’s another question, “Do you know exactly what it will take to retire comfortably and stay that way?” If you’re not sure, that’s ok. A goal-based plan should help you quantify what “enough” means to you and create an awareness on retirement success tomorrow.
Today, there seems to be endless options and choices in our personal and professional lives. It’s easy to let our “lizard brains” trick us into thinking more is better and always the right answer. At Flowerstone Financial, we take a strategic approach to our planning engagements in quantifying enough. This begins with questions designed for you to verbalize what’s most important to you. Our process is straightforward and transparent. We believe in identifying goals, creating a plan on paper, and then holding your investments accountable to such plan. Our view and hierarchy of importance consists of goals, then planning, then the portfolio.
Our approach, versus what most consider a “portfolio first approach,” allows for better engagement and excitement around what you want to accomplish. It’s important to have a plan and be excited about accomplishments. Not just the long term goals but including the short term wins as well. In our experience, when you place too much emphasis on your investments, your attention focuses and narrows to an outcome largely out of your control. This may lead the investor to feel euphoric or depressed around a single investment based on it’s current value. These emotional highs and lows are not healthy (or necessary) when you have a plan and have quantified enough. Who really cares what the value is in a single trading day when you are managing a plan for a multi decade retirement?
What if you started with the end in mind, your goals, peace of mind, and other objectives that you want to accomplish now? Working backwards you can then take a measured approach. How might you accomplish what’s important when you are measuring inputs versus outcomes. Inputs that you control might be what you spend and save. What job description do your accounts serve? Strategic planning should provide you clarity on each account and the role it serves.
We’ll explore this further next time…