As I look ahead to the summer months, I can’t help but think what a challenging year it’s been so far. Even though the threat of COVID-19 will pass, I believe that things will not return completely to normal. Though we may have the same job, the same group of friends and the same favorite restaurant, fundamentally we are different as our perspectives have changed due to the transformative events that have occurred in the past three months and those that will come in the weeks and months ahead.
The impact of these transformative events will show in the lifestyle and financial choices we make moving forward. I have already noticed a change with my clients. Here is what I have observed:
To my Retired Clients: Congratulations on stepping up your technology game!
I know many of you have tried new technology-enabled services for the first time, including grocery delivery, direct-to-consumer goods, in-home subscription entertainment, online banking and, last but certainly not least, communication tools like Skype, FaceTime and Zoom to say connected.
To my Pre-Retirees: I expect a lot of voluntary and involuntary career changes.
In my conversations with many of you, you are thinking long and hard about what you really want to be doing for the remainder of your career and your life. Interestingly, it does not include a 2nd home in Florida. In contrast, it’s centered on sharing your valuable experiences and helping others by teaching, writing, coaching, speaking and mentoring.
To my Career Builders: Is this your depression-era moment?
As a Millennial, you are often labeled as a job-hopper who is typically more motivated by purpose driven work than job stability. Unfortunately, this strategy is best implemented during times of economic prosperity. Many of you have already expressed a shift in your priorities toward saving and stability.
Why am I sharing all this? Well I am a student of the business. Always curious. Always reading. Always learning. On a recent webinar I was introduced to some new research from Morningstar who found that there is a gap between the goals you initially think you want and the goals that are truly relevant and important to you.
Insert the emoji of a light bulb going off in my head!
The events over the last few months have caused many of us to pause, reflect and reassess, so this research is very timely. I ask you to set aside 10 minutes to participate in an exercise that will help you identify the financial goals that are relevant to you, not just today, but for the long term.
- List and rank your top 3 financial goals.
- Take a look at the master list of common financial goals. Are any of the goals on the list important to you? Check the box next to those goals (Select FIVE at most). Rank them in order of importance. (Email me if you would like a print friendly worksheet of this exercise.)
- To be better off than my peers
- To pay for personal self-improvement (e.g. go back to school, learn a skill)
- To experience the excitement of investing
- To start a new business
- To buy a house
- To help pay for my kids’ college education
- To stop working and do something I love
- To go on a dream vacation
- To relocate in retirement
- To care for my aging parents
- To give to charity or other causes I care about
- To feel secure about my finances in retirement
- To feel secure about my finances now
- To leave an inheritance to my loved ones
- To retire early
- To pay for future medical expenses
- To not be a financial burden to my family as I grow older
- To manage my debt
- Compare your initial list and the master list. Consider the goals you wrote down and the goals you checked. Of these goals, what are the top three? Write them down in order of importance.
- (Optional) Have your spouse, partner, girlfriend, and/or boyfriend also complete this experience. Take some time to discuss.
The purpose of having you complete this exercise is to help you find deeper insights into your overarching long-term aspirations and, in doing so, potentially improve your chances of reaching your financial goals. Based on the research from Morningstar, the initial list will reflect top of mind priorities that may or may not be the goals that are truly important to you. Is there a discrepancy between your initial list and the master list? If so, let’s talk about it.