|Get What You Want|
|Written by John D. Buerger, CFP®|
|Wednesday, 18 August 2010 14:55|
If I could pass along one piece of financial advice to you, what would that be?
This piece of advice will likely sound different from what you've heard from other financial professionals. You won't see this on the big financial firm websites ... or hear it suggested by financial experts on TV. I'm not going to package it in a sales pitch or mash it in between a bunch of jargon that is either boring or confusing (or both). You won't have heard this from your parents or any other person you know and trust.
As different as this advice is (and it is well off the beaten track) - IT WORKS! You can embrace it no matter your income, your current wealth, your education or your knowledge about personal finance. Clients from many different walks of life have told me that they enjoy each day more, have less stress about financial issues and feel more confident that they are on track in life.
If I could take all of my writing in this blog (three year's worth and counting) along with my eight years as a financial professional and fiduciary advisor and condense it down to one nugget of wisdom, what would that be?
Here it is ...
Know what is most important to you and why - and get as much of that as you can. Don't buy stuff you don't want ... and ferociously protect what you already have.
And people pay me hundreds of dollars an hour for that? Amazing but true, they do. Why? Because while this advice is simple and anybody could do it, most people won't ... but some hand holding (coaching) and a watchful third party to point out when you're going astray can be worth thousands of dollars in lost wealth each year.
What is the price for true happiness AND peace of mind? That is for you to decide ... and "true happiness AND peace of mind" is what you get through this philosophy and our unique planning process. Here are some more details on each piece of that advice:
Know What You Want
Life is long and complicated, right? We spend decades on this planet from birth to death. But what is the purpose of all this? What really matters? If you are like most people, there are only a few things in life that are so important, you would sacrifice just about anything else to have them.
The more clear you are on what those things are, the better for you.
Maybe your kids or other family members are the most important to you. How about your spouse? An animal? Music? Art? Telling stories? Fine Wine? Great Food? Your relationship with God? These are just a few ideas. I'm certain you have many of your own (send me an email at firstname.lastname@example.org or leave a comment on this blog and share yours with me - I'd love to hear about them).
For me the most important things in life are my relationships with others: connections and conversations. Finding solutions to problems - mine, my clients and my friends - is also at the top of the list. If I could have my way, I would have an endless bar-b-que in my back yard. We'd have great food, fine wine and endless deep conversations, solving problems and being thankful for all that is good in our lives. If my wife and kids were part of this, I'd be in heaven.
These things in life that are most important to you - are your Values. "Values" is not a dirty word. Having them is a good thing because a life in alignment with your values (the things that are most important to you) is a life of happiness, pleasure and peace of mind.
Know WHY You Want It
The "Why" is critical because without it there is no motivation. Without motivation there is no action. Without action you would never purposefully move towards getting what you want.
You need "Action" to get "Results" and people need "Motivation" to take "Action."
You can academically know exactly what is best. Any traditional personal finance advisor will gladly tell you what this is. The "experts" on TV say it over and over: "Spend less than you make. Invest in a well-balanced portfolio. Pay down debt, etc." These are all true statements. Academically they are great advice. But in the real world, your neighbors (and 98% of Americans) won't follow that advice.
Why? - Exactly!
The reason why they won't follow the advice is that their "Why" is important, but it is completely missing or misunderstood. It started when you were three and were constantly asking "Why?" It doesn't stop just because you become an adult. You are still driven by the same organic structure you had as a child.
Your "Why" is critical to your success in getting what you want.
Human beings are - at the core - emotional creatures. We are blessed with the most advanced cognitive brain of any animal on this planet. Yet the vast majority of your choices in life - including almost every single financial choice - is based on your emotional circuitry, not logic. Whether or not you want to admit it, you have a deep, complicated and passionate relationship with money. It is a relationship that trumps ALL logic.
If you don't have the "Why" figured out, your best efforts will forever be compromised by advertising, marketing, politicians and salespeople who know how to manipulate your behavior to get more of what they want (product sales) regardless of what is best for you.
Buy More of What You Want
Once you know what you really want - those super-values for which you would sacrifice just about anything - get more of it. Sometimes that is easy and inexpensive. Sometimes not. The better defined this goal is, the greater will be your motivation to make it happen, though ... so cost becomes less important.
REMEMBER: You need "motivation" to take "action" in order to get the "results" you want.
When you have the motivation, you will bulldoze through any barriers - including cost - to get those results. Make a point every day to be sure you add more of something you truly want to your life. Feed your passions. Feed your soul. Feed your values. Make this your #1 priority for every day.
Buy Less of What You Don't
It is amazing the amount of money we are hoodwinked into spending on stuff most of us don't need and don't even want. We do this for a number of reasons. Marketing and advertising is effective at pitting our hyper-emotional centers against our more logical brain system. The chemical forces that are unleashed in the midst of a "retail therapy addiction" shopping spree are very strong, even if they don't last very long.
Traditional financial planning advice is centered around archaic and ineffective tools like "budgets" and "saving for the future." These tools appeal to the logical mind but have no chance of working for most humans. Why? Because they DO NOT appeal to the emotional centers in the brain. While they are academically correct, they are missing that critical "Why" component. There is no motivation in their application. No motivation means no action. People don't follow budgets any better than they follow diets.
The end results are the same: your neighbors waste lots of money buying stuff they don't want just as they eat food that isn't good for them and makes them fatter - then they feel bad about it because they didn't have the "self discipline" to make an intrinsically failed process work.
It's a vicious cycle that only makes the financial advisors and diet companies a lot of money and loads up the citizens with the attitude that they are helpless: they can't succeed at anything (but have to keep paying to try).
You can do much better than that. Viewing financial choices through the lens of your values allows you to have more of what you want and stop wasting money on stuff you don't want and can't afford. This is because your "values" have a strong emotional component to them.
Your values are motivating in a deeply powerful way.
Protect What You Already Have
The last part of this advice is possibly the most important because I have seen some of the richest lives destroyed by careless neglect. Once you have worked hard and built up some wealth (even if it is your first $1000), it is critical to make sure you don't lose that hard earned wealth by exposing it to needless risk.
Be like a momma bear watching over her cubs. Be ferocious.
Note: The key word here is "needless" risk. There are two natural laws that exists here, "No Risk = No Return" and "Risk Cannot Be Eliminated." These laws are just as immutable as the Law of Gravity.
Risk cannot be eliminated, but you don't have to expose hard earned wealth to needless risk which is something almost all Americans do - even (especially) experienced investors. Here are just a few examples of needless risk:
Following the herd - doing something because everybody else is doing it. Especially when it comes to your money, there is no safety in numbers. Markets crash precisely when everybody thinks they are completely safe. Any doubt? Just look at the real estate market the past five years.
Mistaking the News for Reality - The news media (especially the financial news media) is there to make their advertisers happy. They are there to sell products and services. They are there to alter your perception of what is going on in the world around you so that you will spend more money with their advertisers. In the investment world, that almost always means exposing your hard earned wealth to needless risk (like the Stock Market Roller Coaster) or spending it on (financial) products you don't need and can't afford.
Unless someone can show you how a product, service or even process can get you more of what you really want in life, then you are probably exposing your money to needless risk. Remember the second natural law (Risk Cannot Be Eliminated). Risk is in everything. The better you understand the risks of a particular product or service, the less likely you will expose yourself to needless risk.
You Can Do This - Go Prosper
A Rich and Fulfilling Life - a life where you are adding more of what is important to you every day. A life with less stress and fewer worries. A life where you are confident that you are on track to having more of what you really want.
What's wrong with that?
Nothing - and it is exactly what you will get if you follow this simple advice. And yet most people won't stop their busy lives (full of agonizing tedium and running around chasing their own tails) long enough to embrace this concept. Why? Because that is how we're all wired. Nobody likes change and especially change that comes with it's own perceived reality check.
There is a sort of insane comfort with letting your emotions drive your financial choices. It's like comfort food - probably not all that great for you, but it is easy and it feels good (for now).
I encourage you to push through that natural resistance ... at least long enough to understand what is possible. Anybody can have a richer and more fulfilling life than the one they have now no matter where you are on the quality of life continuum. You are never "done" with that. If you want some help, feel free to contact me or continue to read through posts on this website.
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|Last Updated on Thursday, 19 August 2010 16:50|