I used to think that as my clients increased their net worth, their life satisfaction would rise in lockstep. I worked hard under this illusion. But then, I started discovering research publications from psychologists that showed the low correlation between money and happiness.
This stopped me dead in my tracks. I had always placed great importance on helping people close the gap between where they are and where they want to be, but this research made me question the true value I was providing my clients.
After doing extensive research of my own, I came to a stunning realization: increasing our net worth on its own is unlikely to lead to a satisfied life (unless this increase breaks the cycle of poverty). However, an increased net worth can be very beneficial when used to achieve goals that are aligned with your core beliefs and values.
This brings me to the next step in the process of getting financially organized: create financial goals that are meaningful to you and your family. Your goals need to be connected to your values and personal philosophy. They’ll become invaluable in helping you achieve the things that are important and enriching to your life. A goal lacking passion provides little motivation and greatly reduces the chances of being achieved.
I often tell my clients that there’s nothing wrong with splurging on a passion – even if it is something material – as long as it brings happiness to their lives and does not come at the expense of one of their priorities. However, indulging on items for appearances alone is almost like throwing the money away.
The time frame for achieving a goal is another factor to consider. One of the many lessons I learned from my mother is that, “you always need something to look forward to!” If you’re set to achieve all your goals years from now, it will be pretty hard to get excited about them. In contrast, if all you do is live in the moment, a decade from now you might find you’re not in the position you want to be. I recommend categorizing goals into the following time periods:
Truly dig deep within yourself and don’t be afraid to dream. If your end goal is something you are passionate about, happiness will often be a by-product of achieving it. Your only roadblock to getting there is your own self-doubt. Goal setting can be very therapeutic and is an important step towards achieving your personal and financial goals.
In my case, one of my passions is helping people I care about reach their goals. As a result, I spend a lot of my time and resources working towards that end. It gives me great enjoyment and makes it easy to work hard at it.
My next post discusses the process my practice uses to help our clients reach the goals they care about.