Simon Sinek’s well-known TED talk, “Start with Why” is centered around the concept that an organization should start with their “why” and encourages individuals and companies to ask themselves questions to identify their beliefs, purpose, and why they get out of bed in the morning.
One statement Sinek made in his presentation that stood out to me was, “Very few people and organizations know why they do what they do.” As advisors, we find a lack of attention to “why you do what you do” also holds true for investors. Many individuals haven’t set aside the time needed to analyze and evaluate how they should best manage and invest their money. This often leads to mindlessly spending what passes through their hands without regard to how this may impact their future.
Identifying a personal “why” makes logical sense when it comes to establishing personal goals and career aspirations, but why is there such a gap for investors when it comes to managing their personal finances? First, savings and investments are not a tangible product like purchasing an item from the store. It’s hard for investors to see the benefits of savings now when those benefits may not be realized for decades. On the other hand, spending provides instant gratification and a tangible product. Secondly, setting aside the time for personal finances is challenging when individuals lead busy lives. Saving for their financial future requires investors to be intentional and take action in order to develop a budget and savings plan. It also requires frequent monitoring, patience, and delayed gratification.
A first, and important, step for investors is to identify their personal “why” by assessing their core values. Taking time to sit down and physically list their top three to five values helps investors reflect on what really matters to them. They can ask questions such as, “When I think about my life, what is truly important to me?” and “What role do I want money to play in my life?” This gives investors the opportunity to determine their guiding principles, creates awareness, and helps them recognize areas where they can reduce spending that doesn’t align with what they value most. In return, they can be intentional about saving for goals that can lead to meaningful living.
When we first meet with prospective clients at Foster Group, we like to ask questions that go beyond the numbers and attempt to understand what’s really important to individuals and what purpose money serves in their life. Understanding this very significant aspect of our client’s lives helps ensure their financial planning aligns with their personal values and goals.
While identifying their personal “why” is a necessary first step in the process, it’s important for investors to have an accountability partner that can provide ongoing guidance and advice while monitoring their progress along the way. This is where a financial advisor can add significant value in helping achieve long-term goals. We have the privilege of being able to serve in this capacity every day for our clients. Our mission at Foster Group is to go beyond simply helping our clients function financially, to helping them identify their “why” to align their resources with their life’s aspirations.
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