Are “goals” in financial planning helpful or harmful?

In an effort to inspire clients and potential clients to get into financial planning, we see an endless stream of commercials featuring exotic golf courses, beaches, sailboats, and marine mammals. Words like “hopes,” “dreams,” and “emotions” are often called out. And for the smaller subset of people in this world who use these terms regularly, this reference may be useful.

But what about the rest of us?

In fact, many of these words fall on deaf ears for lack of resonance – as they sound a little more exciting than the reality we seek. Even popular phrases like “estate planning” and “wealth management” can seem distant to people with assets in the millions because they still don’t feel like the words “property” and “wealth” really apply to them.

Heck, even some of the most common words referred to in financial planning—like “values” and “goals”—aren’t exactly everyday language for most people. Can you imagine your crazy uncle busting the Mission Statement while getting a third helping of stuffing for the upcoming Thanksgiving dinner?


Let’s be clear: There is nothing wrong with using any of these terms and phrases. In fact, many of them are well applied in the practice of planning financial life. But we must realize two things about the language of financial planning:

1) Different words will stimulate different people differently.

2) Words are a means rather than an end.


Because different words will trigger people differently, we should stick loosely to our personal favorites. For example, a financial advisor might be a hardcore “values” person, finding a great deal of personal motivation as a Stephen Covey enthusiast, but her client might have a negative association with the word. If that were the case, her efforts would almost certainly be better spent searching for another source of rhetorical motivation, rather than trying to retrain their attachment by insisting on “values-based financial planning.”

And it doesn’t even have to be a negative association—it could just be that there’s no association, even with a word that’s become a financial planning staple (if not a sacred cow), like “goals.” Interestingly, this word seems to evoke a great deal of passion, both from its proponents and detractors in the field of financial planning.

Some consider goals to be the purpose of financial planning. why not? We start by identifying what is most important to a person (their values, if you will), set goals that support those values, and make plans to achieve those goals. there he is! It makes perfect sense. But…


Others, however, argue that creating tangible goals, especially long-term ones, is inherently challenged because life is so non-linear — who really knows where they’ll be or what they want 5 or 10, much less 20 or 30 years from now? They further argue that the inherently variable compounds often used to reach said goals, such as the stock market, make them far less accurate than they might seem. The end effect, as well said, is that over-focusing on goals can actually be debilitating fromStimulate.

What is our position on that?

Perhaps Sulaymaniyah wisdom here is somewhere in between. Goals may succeed when they succeed – and not succeed when they don’t. It may work best when applied as a means rather than an end.

But, how could it be? Well, when we’ve done a good job of discerning someone’s motives, it may be that a concrete goal helps create some attraction and sets a positive course.

borrow from Brendan Fraser borrow from Greg McKeownWhat we really need for effective motivation is something meaningful And Measurable.


I would argue that we begin and end with meaning. For example, many people would like to have more Peace of mind. Very meaningful – but impossible to measure completely, right? However, through effective exploration, we know that a particular individual sleeps better at night when he has $X.00 in his savings account. Thus, the goal of saving $X.00 becomes a way to achieve peace of mind.

Another example: Some — I think, especially those heading into the retirement phase of life — are driven by the idea that they are have enough. Enough, of course, a ridiculously relative term. It’s a feeling, not a number. No financial advisor on the planet can guarantee that anyone else will have enough money saved, invested, pension, or annuity streams that they have a 100% chance of exceeding all their expenses.

But with careful analysis, we can certainly make a very positive (or unfavorable) opinion that you can withdraw $Y.00 per month and potentially maintain that income stream with periodic inflationary boost over your lifetime. The monthly income figure is the goal – the means – but that glorious feeling Contentment it’s the end.


Finally, let’s remember that as financial advisors, we shouldn’t hold too tightly to any of our financial advisory words. It really is the customer’s important words and will do the best job of motivating them. Therefore, whenever possible, we should stick loosely to our own slang and use the words that would trigger our customers the most – their own.

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