The longer I do my job as a financial planner, the more I understand that the chances of clients achieving their plans is greatly increased by their ability to visualise the outcome they want. They can then engage with that outcome and focus on its success. In my observations of clients’ engagement with their future, I have identified four factors to help you focus on your goals.
How I spend time with my clients
My regular reviews with financial planning clients all take much the same form. After a few minutes catching up with the recent events in their lives, we revisit their financial forecast, which is a visualisation of their route to their desired outcome. This will tell us whether they are on track or not.
If applicable, we discuss why they are projected to miss their target aims, and what they can do to catch back up. Sometimes this can be disheartening, but I always remind them of the reason they are sacrificing as they are, focusing their attention on the objective of the exercise. Then we’ll look at some maintenance issues such as capital gain or loss harvesting, maximising tax-free allowances and such like.
By far the majority of the time is talking about them and their circumstances; their hopes for their family and their own part in helping their family in the future. This is what the client cares about; after all, they’re leaving the technical stuff to me. If I have an hour with the client, we’ll spend maybe a quarter of that talking about the money, with the remaining 45 minutes talking about life.
This is not just to pass the time, but is an essential part of making sure my clients remain engaged with the process between the times I am with them.
After all, achieving financial goals takes time, and it is easy to be discouraged along the way. In last week’s video I looked at some external sources of inspiration and motivation. But here are four factors for realising your goals, financial or otherwise, that you can practice to help you stay the course.
Four factors to help you focus on your goals
1. Visualise your goals
Most people have no way to visualise their finances. About every ten years, I may come across a client who is a whizz at Excel, and who can manipulate the data to project their situation forward many years to come. But most people cannot translate numbers into pictures.
Visualising goals is so important if we are to stand the best chance of achieving them. The best way to do this is to place yourself into the future, and write down what it would feel like to achieve your goals in the present tense.
So rather than writing “I will one day have enough wealth accumulated so that I will not have to work to live”, you should write: I have enough money that I wake up each morning, happy that my time is my own and that there are no demands on my time, other than those I want to be there.”
There is real merit in being as detailed as possible with these visualisations. If your future self is able to wake up on the veranda of a nice hotel somewhere, then describe that, including the sights and sounds that greet you. Detailed visualisations are more likely to inspire us to stay the course.
2. Set your goals in context
Abstract goals are less likely to inspire and motivate than goals which are rooted in the context of our families and friends.
When thinking about your visualisations, build in the other people that are important to you. How will they be affected, Positively presumably, by your success. If you’re wried this way you could even think about how they might be negatively affected by your failure to achieve.
Think about physical places, your home, places of recreation, favourite things to do, and include all these in your plans. This anchors them in reality, making them just a step or two beyond where you are now. You will be able to imagine a better version of the life you are living now, unless you want to leave the country and retire to Grand Cayman!
3. Keep the goals front of mind
Last year I set myself some goals, and I kept them in a note in Evernote, one of my all time favourite apps. The problem was I never looked at the goals, and some (not all!) of them fell by the wayside.
This year I have printed my goals out on an A3 sheet of paper kept right next to my desk. At the top of the sheet it says 2016 – The Best Year Ever. My colleagues and clients comment on it, which is pretty good motivation for sticking to my plans!
When you have visualised your goals, you should keep them visible, somewhere you will constantly be reminded of what it is you are aiming for. Maybe the fridge door, the front of your diary, or over your bathroom mirror. Don’t bury your wonderful future deep in your mind where no-one can see it, least of all you.
4. Focus on the end more than the means
This is such an important part of the conversation with my clients. It can be so easy to get bogged down in to conversation about which fund is under- or over performing. Or whether a new piece of pensions legislation threatens to adversely affect their plans. But by keeping busy with the minutiae, it is easy to lose sight of the big picture.
I’m convinced that once a portfolio is set up correctly, it should largely look after itself with very little tinkering. So many advisers think their value to clients is in the tinkering, but I am convinced that I am often more of a life coach than a financial adviser.
It is important to be constantly reminded of the end goal, and to spend time focusing on that, rather than sweating the day-to-day small stuff. Sure, you should make sure everything is on track, but do that once or twice a year, with the help of your adviser if you have one. For the other 364 days of the year, lift your head up and keep your eyes on the prize.
What about you?
I wonder, do you spend more time thinking about the performance of a fund than what your life will be like when you meet your future goals? How might you make one small change to focus more on the goals so that they become real to you?