Goals are Key to Designing Your Rich Life

Financial Life Planning is a holistic process that will help you to clarify your values and guide you in defining and designing your unique version of the “rich life.”

Goal setting is an essential component of this process, and a powerful tool for experiencing what is most important to you.  When you imagine what you want your life to be like and what you want to achieve, these images will become the basis of your life and financial goals. (more…)

Holistic Planning for Later In Life

We often equate preparing for old age with achieving the financial security needed to sustain us throughout life. However, a truly successful and fulfilling aging experience requires planning and preparation in all areas of life.

Financial planning is indeed important, but money alone cannot “buy” happiness, good health, meaningful relationships, and purposeful activities. In The Late-Start Investor, John Wasik wrote:

“Instead of absorbing an obsolete view of retirement, you should consider what I call your New Prosperity. This includes a flexible life plan that provides for your financial, vocational, physical, emotional, and spiritual needs. Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.” (more…)

Nurturing Financial Capability

Financial capability is defined as the capacity—based on knowledge, skills, and access—to manage financial resources effectively.

All parents, of course, hope their children will grow up to be financially responsible, savvy, and confident adults. However, because financial education has rarely been taught at home or in schools, most parents themselves feel ill-equipped to train and guide their children in matters of money. (more…)

Defining the Why of Your Goals

Failing to reach our personal and financial goals can be both frustrating and disheartening. And, to make matters worse, we often realize that we are our own worst enemies when it comes to sabotaging our dreams.

However, research has shown that we can dramatically increase our rate of success by first determining a meaningful and internally motivated “why” for each of our goal pursuits.

Self-Determination Theory (SDT) is a model of human motivation that is concerned with supporting our natural or intrinsic tendencies to behave in effective and healthy ways. This widely accepted model was initially developed by Edward L. Deci and Richard M. Ryan, psychology professors at the University of Rochester, and is now researched and practiced around the world. (more…)

Albert Bandura & Self-Efficacy

Albert Bandura, Ph.D. is regarded as one of the most eminent psychologists of our time.  Bandura started his career in 1953 and still maintains an active schedule of teaching and research at Stanford University.  On the occasion of his 80th birthday, he wrote:

“As I reflect on my journey to this octogenarian milepost, I am reminded of the saying that it is not the miles traveled but the amount of tread remaining that is important.  When I last checked, I still have too much tread left to gear down or to conclude this engaging Odyssey.” (more…)

Financial Confidence

Self-confidence is your own evaluation of your abilities to accomplish a given task. “Stepping outside of my comfort zone” is a phrase many of us use to describe how we feel in situations where we don’t know how well we will perform or how others will respond to us.

It is the level of your self-confidence that is likely to determine what goals you will set and what actions you will take.  Many individuals can be self-assured in other areas of their lives, but not feel confident when it comes to matters of money management and financial planning. (more…)

A New Perspective on Risk Tolerance

When you are making an investment decision, do you intentionally weigh the potential risks and rewards?  Is weighing that balance more of a rational or emotional process for you?  In other words, do you tend to rely more on facts or on feelings?

For investors, “risk” is defined as the chance to experience loss versus the chance to experience a gain.  At one end of the risk tolerance continuum are those individuals who are averse to risk.  They focus their thinking on the “loss” part of the equation.  For them, risk is anxiety producing and a factor to be avoided.  They want to stick with the known and predictable.  In addition, those who are risk averse value financial stability above all else.  Therefore, they are willing to sacrifice higher returns to achieve that sense of guarantee. (more…)

Kids Need Money Mentors

With the level of consumer debt skyrocketing and the cost of housing, education, and health care increasing at double digit rates, younger generations are facing unprecedented challenges to achieving economic security and financial independence.  Therefore, helping our youth to learn effective money management skills, and to adopt good financial habits and attitudes, is more important than ever.

So what can you do if you are worried about the financial future of your children, grandchildren, nieces, and nephews?  The place to start is by considering the positive influence you can have in shaping their financial well-being.  Next, think about and choose specific ways that you can be a proactive Money Mentor in their lives.  Here are suggestions and resources to get you started: (more…)

Finding Meaning in the Second Half of Life

Individuals in mid-life and beyond are increasingly viewing retirement not as a time to relax, but as a time to explore their potential.  It was Abraham Maslow, a psychologist, who gave us the term, “self actualization.”  He called it man’s desire for fulfillment, “to become everything that one is capable of becoming.”

For many, the path to self-actualization is through their “work”—which should be defined as the productive activities, paid or unpaid, that gives their lives meaning and a sense of purpose.  Helen Harkness wrote that linking work to the need for meaning has been a natural evolution: (more…)

A Shift in Priorities

A shift in prioritiesThe inaugural American Dream Study, conducted in 2007, revealed an insatiable hunger for more and better material possessions.  In addition, the bar was continually rising for what was considered “basic necessities.”  However, across all social strata, the economic crisis has been a loud wake up call.

Respondents to the 2009 version of the study reported that they are eating at home more often, shopping more at big box discount stores, spending less on movies, and moving away from brand-name products to generics (www.metlife.com).  And, unlike previous downturns, no one seems to be immune. (more…)