Let's Change the Conversation

Grant Sims, CFP

Grant Sims, CFP

As January has come, many clients start the new year by revisiting their financial goals. Just as in your personal life, a little planning is likely better than none and adding details to your financial goals are better than wishful desires.

In the conversations we have with clients we want to shift the focus away from goals, and instead emphasize our clients’ desired outcomes.  It sounds like the same thing--goals and desired outcomes—yet, in our opinion, there is a subtle and significant difference. 

Outcomes typically come from a different place than goals; they are heart-level desires. Most goals can be directly purchased or achieved with money; a desired outcome typically cannot.

Rather than only asking, “What are my goals for the future?”, an additional question might be considered: “If all the things I have identified came true, what then would be true in my life?” In other words, what outcomes would the achievement of these goals bring about in your life; what would they give you the ability to do that you can’t or aren’t doing right now? 

Consider the following illustration. A small business owner was approaching retirement with his wife. They had worked hard to grow the business and save as much as they could. They had a goal of retiring with significant retirement assets and the proceeds from the sale of the business.  Unfortunately his business transition plan with his top manager fell through and the manager left to start his own company, taking half the former clients.

The couple were crushed as they realized even if a new buyer was found, the business would be worth less than half the previous value. They were depending on the full value of their assets and business to achieve their ideal retirement, which included: purchasing a vacation home on the lake, volunteering with some of their favorite non-profit organizations, and traveling through Europe. With the loss of business value, they felt they would either need to postpone retirement by several years, or significantly alter their lifestyle plans.

But when they met with an advisor, a simple question began to change their perspective: “What do you want to do at the house on the lake?” They responded that they would like to spend their summers at the lake visiting with kids and grandkids, fishing and writing.

Then the advisor asked, “Do you need to own the home?” Their answer of “no” revealed that while their goal had been to buy a lake house, their desired outcome was spending time with family and pursuing specific hobbies for a few months a year, which did not require the large amount of assets needed to purchase a property.

Consequently, with the change in their financial circumstance, while their goal was now unachievable, their desired outcome was still viable by renting a home in the summers.

The advisor helped them focus on the outcome and experiences they wanted, rather than having the assets they thought they needed to achieve their goals. Once their true desired outcome was identified, alternative options provided funding for everything they wanted in retirement without having to build the business back up or push off retirement. 

 As I have heard multiple wise advisors say, “money is NEVER the final product or end result, it is simply the tool to achieve what you truly desire.” As we plan for retirement, let’s change the conversation from hopeful goals to designing a plan to keep you on track to achieve your most important desired outcomes. 





      This material is intended to be educational in nature, and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client.  These materials are not intended as any form of substitute for individualized investment advice.  The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own.  Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. Munn Wealth Management can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.

      These materials contain references to hypothetical case studies.  These are presented for the purpose of demonstrating a concept or idea, and not intended to be interpreted as representing any specific person.  Such representations are not intended to substitute for individual investment advice, even if the case study appears to have similar characteristics.  1323DGJ