Step 1: How to be clear on what you want

Traditionally this part is called goal-setting. That’s a pretty beige description for what is one of the most important parts of planning for your future. This is the good stuff, this is where you get to set out what’s important to you and why.

This is where you chat about your views on money – are you comfortable but just looking for a way to do what you do more efficiently, cheaper, better, or does it cause you anxiety? This is the part where you get to put it all on the table – I always encourage my clients to put it all out there, the good, the bad and the ugly.

The number one fear, the number one thing that holds people back is the fear that they’ll be exposed as “stupid – because everyone else knows this stuff”. Let me just put this into perspective. If everyone knew it, if it was just you that didn’t know the minute detail of the financial system, there would be no financial advisers, there would be no need for them. Just quietly, I don’t know it all either (nobody does). I know where my expertise stops, I’m really comfortable saying I don’t know and going off to research it.

Back to setting out what’s important…

5 Simple questions

Sometimes the people I’m talking to know exactly what they want, but most of us need to talk it through. Sometimes the process of just saying it out loud, talking it through, can bring out the thing at the back of your mind and it helps crystallise what’s important. To help the process along, I ask the same questions each time:

1. How important is money?

2. What’s more important than money?

3. What keeps you awake at night?

4. What’s on your wish list?

5. What’s been holding you back, or stopping you?

5 simple questions provoke a fascinating conversation. It’s not uncommon for someone to come back in and add something to the list, because they didn’t realise how important it was to them until they started to think it through in a quiet moment. Those are some of my favourites.

3 different types of goals

The sort of goals I hear fit broadly into 3 categories:

Goals based on fear

  • I’m so stressed about the debt, the mortgage, I just want it gone and I just want to stop worrying.
  • I’m worried my kids aren’t going to be OK, property’s so expensive.
  • I don’t want to mess this up, I just don’t want to look back with regret in 10 years time.
  • I earn good money, I don’t know where it goes and I feel like I’m messing this up, just drifting aimlessly.

Practical goals

  • I want to retire comfortably at 65. What do we need to do to make that happen?
  • I want to get some insurances sorted out so I know the family will be OK financially if I die.
  • I want to pay less tax

Aspirational goals

  • I want to drink too much red wine in an underground jazz club in Paris.
  • I want to get glammed up, go and watch Euro Vision – live.
  • I want the Porsche I never got the chance to buy for my Dad, the one we loved in Candy Apple Red.
  • I want to take my kids on a big trip overseas, spend time with them – before I become embarrassing 🙂

p.s. these are all real goals

Gathering your thoughts

With what’s important to you set out, we put your goals, your wish list, in order of priority – the non-negotiables through to the nice-to-haves. Next, we add the finer detail so you have it all locked down. Finally, add in timeframes.

Whilst your wants may differ according to your means, this approach works whether you earn $100,000 or $1,000,000.

Congratulations, goal setting is done. You’ve now got a clear picture of what’s important to you and why. You’ve put it down on paper, you know which you’re going to tackle first and in what timeframe. What we have now is the foundation for a cracking financial plan.

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