Why Exactly Are You Trying to Grow Your Wealth?
In our December 2020 post, we detailed “investing with a purpose.” In that post, we stated, “Accumulating wealth is not a purpose. It may be an outcome, but it is not the reason why people make long-term financial decisions.”
If our drive for money is to help us to achieve the lifestyle we want, we’ll have a much better chance of success. When you understand your “why,” your efforts point toward something of value. Your income and the reason you save your money has to have a purpose—not just to pay bills.
Personal values drive behavior. Values help guide the decisions we make. They keep us on track. You should make spending, saving, and investing decisions with your purpose in mind. If you understand why you want to grow your wealth, you will be more likely to stick to your budget. It will be easier to save more. The debt accumulated, if any, will be carefully analyzed and weighed against your values and purpose.
Money With a Purpose
The “why” can be different for many people. A common reason is to obtain financial freedom or financial peace. Or to pay for your child’s or grandchild’s college education. Or to spend as much personal time with family. Once that purpose is established, you tend to make financial decisions that seek to reach that goal. For example, if your “why” is to be able to live in a villa in Tuscany within 20 years without financial worry, your behavior should reflect this goal, including learning how to speak Italian! With the goal in mind, large purchases will be more considered, budgets will be less likely expended, and debt will be more efficiently paid.
Having a marrow-deep motivation helps to ensure that you reach that goal. And you can only be motivated if you know your purpose behind it. Purpose gives us focus.
Enacting a financial plan without a purpose is akin to taking an ambling journey, as opposed to the direct route to your destination. If you haven’t thought of this already, maybe it’s time to propel thought into action.
At Isakov Planning Group, we encourage people to align their money with the way they want to live. Start with the fundamentals: (1) Spend less than you earn, (2) invest the amount you saved, and (3) eliminate debt (to the extent possible). These are the first steps to being able to support your holistic “why.”
Contact us at Isakov Planning Group, and we’ll help you peel away the layers to reveal your “why,” and figure out a way to help you financially support this quest.