As part of any wealth building process, you must articulate what financial success actually means to you. It’s not something we talk about very much but there are a lot of different definitions of ‘wealth.’ Some of it is perspective, but it has to do with your priorities as well. Do you want more money? More time? More freedom? How much money do you need to have in order to properly support the lifestyle you desire? Recognising and being honest about what’s most important to you as well as how much monetary wealth you need to have in order to support your vision of the good life is a crucial step in formulating a successful wealth plan.
Look at Your Timeline
Depending on where you are in your life and your financial journey you may or may not have started to understand how your desired financial outcomes need to play out over time. If you are still young, retirement might feel like a very far away abstraction. But don’t be fooled, time passes quickly.
The easiest way to break this down a timeline down is in 5-year increments. Ask yourself where you want to be financially in the next five years, ten years and so on until you reach the age of your desired retirement. Be specific about what kind of home you have, what kind of life choices you get to make because of your income and where your investments are. Your money won’t be just sitting in the bank, it’s going to be tied up, so pay attention to where you want it to go.
Be Honest About Your Priorities
There is no set number for true financial success. It’s all about personal priorities and this isn’t the time to play the comparison game. For some, it’s about what material objects they can obtain, for others, it’s about freeing up time and having money to travel. For a good friend of mine, Roger, it’s all about being able to send his kids to the best schools. For him, this is of the utmost importance and his financial vision has necessarily adapted to creating the resources necessary to afford the best education available. He has made it his mission to make this happen and is well on his way to success. Whatever your priorities are, articulate them, visualise, and plan accordingly.
Just as you do in your financial visualisation exercises, be precise with your desire when it comes to planning your financial future. You’ll be doing yourself a disservice if you are too vague or wishy-washy about this. Make sure you are documenting dates and goals that align with your vision. It’s only through this hard work that your outcome will come to fruition.
- Be honest about what’s important to you—and anyone you are planning your financial future with.
- Set your timeline. You need to map out your path if you want to arrive at your desired destination. Jumping from now to retirement won’t draw you a detailed enough map to get where you need to be.
- Be specific. Don’t just throw out a number and don’t get lazy because the future seems far away. Be specific about where you want your money to be. Are you going to be involved in real estate? Long-term investments? Business assets? Map out your desired assets as well as money in the bank.
Whatever your personal definition of financial success is, you’re far more likely to achieve it if you plan precisely and give yourself the tools to execute it properly.
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