As a financial adviser it is common practice to work with clients and help them in setting financial goals. However, while goals are important, it can be easy to lose focus as to why the goal is important.

Too often I meet with new clients who want to save more, invest more or make more, without a reason. Don’t get me wrong, these are all great qualities to possess, but sometimes the motivations for doing something like this are not on line with the clients true goals.

To illustrate, I met a couple in their mid-30’s who were extremely focused on reducing their mortgage, so they could buy an investment property, and then another, and then another. They had two young children and they wanted to be “financially free”. When I asked what financial freedom means to them, they said the ability to do what they want, when they want and spend as much time with their family as they desired.

An admiral goal, but they did not consider the amount of time and money and effort that would be required to achieve this goal.

When we looked at their financial options there were several things they could do; reduce their current expenses, take longer to achieve their goal, purchase fewer properties or seek higher paying jobs.

Because they had a mentality of “we must do this now” they opted to slash their budget – diverting cash away from family holidays, presents and entertainment.

As an adviser, the problem is usually getting people to reduce their expenditure on these expenses. But with this couple, they were so focussed on achieving their “financial freedom” they believed that cutting family holidays and entertainment was a great way to get their goal.

Now, here’s the thing, their end goal was to spend time with their family – not own a dozen investment properties. A dozen investment properties would surely create wealth – but they could already achieve their goal of spending time with their family, today.

So what is the point?

Set Financial Goals, but don’t sacrifice Everything

When considering a financial goal – ask yourself – Why are we doing this? Is it be rich? Is it to be free? Is it to be comfortable?

Once you understand this you can start to look at different financial strategies to help meet your goals.

In the instance of the couple I met, we agreed that sacrificing everything today for happiness in the future is not a great way to live one’s life and achieve one’s financial plan. We looked at the different options and settled on a longer term strategy, that saw them enjoying time with their family, but also accelerating their wealth accumulation strategy.

It is possible to have your cake and eat it to, but it can be a fine balancing act.


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