Don’t Let Small Numbers Distract You From the Big Picture

Even though it’s all about dollars and cents, the financial industry runs on percentages; dollar signs are few and far between. The use of percentages is an understandable, and helpful, convention when communicating financial information. After all, a headline saying “Company A’s Net Jumps by 16%” is more helpful than one that reads “Company A’s Net Jumps to $1.02 billion.” Providing percentages rather than dollars also allows investors to compare apples to apples: You can readily discern that an investment that has gained 8% during the past 10 years has been a better bet than one that has gained half as much.

Yet dealing in percentages, especially relatively small ones like inflation rates, expense ratios, and long-term annualized returns, can also distract from important information that factors into your financial plan. Those small and innocuous-looking percentage figures, when translated into dollar terms and compounded over many years, can make a huge difference between success and failure. (more…)

Goal Setting Outside of the Box

“We should never let reality interfere with our dreams.
Reality can’t see what we can see.”  —Simon Sinek

Goals are targets—something to aim for.  They give life a sense of purpose and direction.  In addition, setting goals is a proactive way of designing your life, initiating positive change, and preparing for the future. (more…)

Reframing Your Goal Setting Strategy

In his book Getting Things Done, author David Allen wrote, “We know that the focus we hold in our minds affects what we perceive and how we perform.”

Therefore, as you visualize the lifestyle and quality of life that you would like to have in the future, always remember that the secret to realizing your dreams is to maintain that image in your mind.

In fact, the greater your understanding of what is important to you, the easier it will be to “paint a picture” in your mind of what you are working toward.  Whatever you identify and claim for yourself will become the basis for your life goals. (more…)

Life Planning vs. Retirement Planning

In the past, the transition to retirement has been viewed solely as an economic event. As a result, the focus of retirement planning has always been on building a nest egg.

In The Late-Start Investor, author John Wasik recommends discarding this obsolete view in favor of a “flexible life plan that provides for financial, vocational, physical, emotional, and spiritual needs.”  He explains, “Unless you look at your future holistically, merely saving up a pile of money will be a meaningless act.” (more…)

Thriving on Purpose

Because life expectancy has increased dramatically since the turn of the 20th century, your most important challenge and opportunity is to make the most of your “bonus” years. Therefore, as you proactively prepare for life as an older adult, resolve to not only live longer, but to live better as well.

In their bestselling book Successful Aging, John Rowe, M.D. and Robert Kahn, Ph.D. documented the results of ten years of ground breaking research on aging. As a result of their exhaustive investigation, the authors concluded that there are three main components of successful aging: (more…)

The Magic of Purpose-Based Goals

Do you desire to be rich? The word “rich” can be defined as “possessing great material wealth,” and it can also be defined as that which is “abundant, meaningful, and significant.” Therefore, which kind of wealth do you desire the most? Do you want to experience a life of riches or a rich life?

Author Pamela York asks a similar question that is reflected in the title of her book, How Much is Enough? She writes, “The question is deceptively simple, but the answer is critical to integrating money with other aspects of your life and finding happiness.” (more…)