goals and objectives

Wealth and Living a Rich Life

It would seem that popular society, in its current state, places a high value on material wealth. This can be seen all over mainstream news channels, reality television shows and neighborhoods across the United States. Such a great importance is placed on material wealth, that the perception of wealth has become a priority over, and became confused with, living a great life.

Any individual’s stance on this issue is none of my concern, as I do not intend to project my ideals and beliefs on anyone. However, I do think that certain behaviors, as described below, affect the long-term prosperity of individuals and families. I would like to convey the financial impacts of these decisions and how they can affect your financial plan.

Living a Rich Life

It is my personal opinion that a rich life is one full of challenging experiences, adventures and hard work. These elements of a great life can be accomplished with or without large sums of money. While money can provide the freedom and time to live a rich life, it really doesn’t help much beyond that.

Living a great life is more of a matter of attitude than financial resources. Those that set and complete realistic and achievable goals, enjoy the satisfaction of accomplishment. It is when we being to compare ourselves to others, when we lose our sense of value and self-worth.

If you feel as though you need to change your life in order to feel happier, then I suggest making a list of your life’s goals and objectives. List the things that you want to accomplish and what’s important to you. This exercise should help you begin to design a satisfying life. In addition this exercise will provide a foundation to prioritize your financial resources in-order to life the life you want.

The Costs of Perceived Wealth

The expenses accumulated while maintaining the perception of wealth undermines every conceivable attempt to accumulate real wealth (both in a material and quality of life sense). This spending behavior eventually creates a financial situation that is very difficult to turn-around, leading to the potential of a unfulfilling life.

Making short-term financial decisions without understanding (or completely disregarding) the financial impacts over the long-term plagues most of our decision-making processes. This is not only evident in individuals and families, but also corporations and budget appropriators in Congress. Making the least savvy financial decisions on a regular will eventually erode the rich life you could’ve had, no matter how small the amount.

Making Financial Sacrifices

More often than not, small and usually short-term, sacrifices are required to enable long-term success. This is true if you would like to improve your athletic performance, grades at school or financial future.

While making financial sacrifices will most likely reduce your ability to maximize the perception of wealth or success in the short-term, in a few years you will be much better off than you would’ve been. This is the largest benefit of creating and implementing a financial plan; living a fulfilling and rich life.

Financial wealth is not a measure of a rich or successful life. A great life is lived through the accumulation of rewarding experiences, helping those around you and hard work. Despite it’s popularity in mainstream culture, having money is different from being happy.

Financial Planning Goals and Life Planning

The first step in the financial planning process is to create a list of goals and objectives that you would like to accomplish. Despite what seems to be a easy task, setting goals is more difficult that it looks. In fact I believe that defining goals is the most challenging step in the financial planning process.

Goals are difficult to define due to the subjective nature of determining what we want out of life and really figuring out what fulfills our personal needs. Setting goals and objectives is a mix of both art and science. The following methods should help you complete the first step of your financial plan.

Life Planning

Life planning is the practice of identifying and achieving personal goals. Unlike many financial plans that include only financial goals, life planning seeks to illustrate and describe the life that you want to live.

Financial planning’s true purpose is to ensure that you have the resources that you need to live the life that you want. However before we can determine what resources that you will need you should determine your preferred lifestyle. I understand that this is not a simple task, however it can be an powerful tool that you can use to increase your standard of living.

Take some time and describe your perfect life. What would you do if you didn’t have to worry about working or saving money. However remember to keep it realistic.

Create a List of SMART Goals

To ensure that you create the best goals and objective that you can, remember to utilize the following elements.

Specific - Your financial plan’s goals should be specific and clear. Describe what it is that you would like to accomplish.

Measurable - Financial planning goals also need to be measurable. This will ensure that you know what success looks like and will be able to determine when you have accomplished it.

Attainable - All goals and objectives need to be obtainable. However this does not mean create easy goals, just goals that are realistic and feasible.

Relevant - Ensure that what you are striving for fits your desired lifestyle. Its also helpful if you create a series of hierarchical goals that come together to accomplish larger objectives.

Time-bound - List the specific dates that you would like to accomplish each and every one of your financial plan’s goals. This will help motivate you and keep you on the right track.

Setting and Managing Priorities

Its normal to have more goals than time and resources to accomplish them; this is to be expected. However in order to ensure that you accomplish as many of your financial planning goals that you have, its a good idea to set priorities for each one.

In order to prioritize your goals you can choose any scale that you would like, numbers (1-10), colors (green, yellow, red), etc. Assign each one of your goals a priority and list them from highest to lowest. After you have determined your current financial situation, this list can be used to determine which resource you will use to accomplish your highest priority goals and objectives.

Developing goals and objectives is the heart of a financial plan. Without goals a financial plan is just a report of your financial situation and not a guide that will get you to where you want to be. In addition financial planning is much more than getting your finances in order, its about living the life you want to live.