Horoscopes are fun to read but I don’t typically put too much faith in them. However, I’ve found that my astrological sign has many of my personality traits down exactly. For example, one of the many qualities of a Pisces is that we are dreamers. Our heads are always somewhere in the clouds and we are typically imaginative and optimistic about life. I daydream at least once a day, letting my thoughts run wild. I could daydream about anything from what I watched on TV the night before, to living in France, to what my life might look like in the next 5-10 years. Daydreaming is often regarded as a silly waste of time. However, when it comes to financial planning, dreaming a little bit is a good thing! Dreaming allows you to develop goals for your future and the future of those who are important to you. With proper financial planning, those dreams are much easier to attain.
It’s not enough to dream.
I know this sounds simple but if you don’t actually believe that your dreams could be a reality, they won’t be. I’ve had friends say to me, “I’d love to (insert cool thing here),” but I can tell just from listening to them that they don’t even see this as a reality for themselves. They are already defeated in their minds and have already determined that this “daydream” is too far out of reach. This is why a financial advisor also plays the dual role of your financial coach. Sometimes we need to hear someone say: “You can do it,” or “Let’s try this way.” We need someone who has our best interest in mind and someone who can be positive and proactive about things that are important to us.
Write your Goals Down.
Others of us have the motivation to make dreams a reality but lack the organizational skills and the time to deal with all that goes into getting something done. I have found that the best way to keep track of my goals is to write them down and then refer back to that list often. This is also helpful when it comes time to sit down with a financial planner. One of the early stages of the financial planning process is gathering data and discussing goals. It is such an important step that it is usually the first meeting we have with our clients before discussing anything else. During this stage, we aren’t giving much, if any planning advice but instead using this time to listen to what the client wants and then writing it down for our own records. Knowing what your goals are allows us to make a financial plan that is specific to your needs, wants and desires.
Ask yourself questions. Give specific answers.
Some questions that you might want to think about, or questions a financial planner may ask you, are: “How do you define success?” “What do you want your future to look like?” “What is it that you’ve always wanted to have or do?” For some people, success is a number. They expect to feel successful when their net worth is over 5 million or when they have a certain number of clients in their business. For others, success is something they can do. For example, one may feel successful once they have been able to send all of their children to college while another person would be happy retiring in the south of France.
It’s a lot easier for a financial advisor to offer help when goals are specific rather than general. For example: “I’d like to retire at age 65 with 2.5 million dollars in retirement savings” instead of “I’d like to retire rich.”
Another important question is asking yourself when you want to achieve these goals. Some people are planning for a vacation, retirement, a baby, buying a new home, increasing their savings, providing for a child or grandchild’s college expenses, or starting a new business. There are obviously different time-horizons for each goal and it is important to know this as well so that realistic expectations can be set, proper planning can be done to meet goals and adjustments can be made if necessary.
Your financial advisor’s role in your goals.
Financial advisors help you determine “how to get there” by providing a roadmap for success. We ask questions to determine your needs, gather and analyze the data provided (such as salary, current expenses, other income, and tax returns for example), analyze economic factors like current inflation rates, and run scenarios to determine how achievable your goals are given the time frame and with what risks you are willing to take. Most importantly, we monitor these goals and other data frequently as things change.
This is a prime example of how fee-only financial advisory firms such as JoycePayne Partners put our clients’ needs first. Being fee-only allows us to focus on your specific needs and wants as opposed to focusing on what products can be sold to get us higher commissions. Having a financial advisor there every step of the way ensures that your goals remain at the forefront of your financial plan and is a major bridge in making dreams into reality.