Realistic Expectations

The animal species called human? Isn’t it interesting how we react? The emotions that we let control are financial decisions, let control our friendships, our faith and the actions we take. How can we as animals be so emotional, so driven to take action that makes us feel better even if not prudent or wise.

With interest I recently watched as a client who recently engaged with me in the first three months decided the following:
1. Decided to retire years earlier than when we first spoke. (Whether they could afford it or not).
2. This means that we are not going to be able to save as much as we planned. (Yet they still expect the same results).
3. They decided they had to be aggressive because they cannot afford to be the appropriate risk tolerance that fit their psyche or that they were comfortable with. Otherwise they would not have any chance to meet their goals. (Do we understand what risk means?)
4. They expected 15% return. (Maybe we should go to Las Vegas and play craps as an investment tool).
5. They would not discuss spending less, retiring later or saving more even though the likelihood of long-term investments returning 15% consistently is almost nil. (Whatever happened to being prudent and systematic about our processes?)

So how does a rational person come to a conclusion that we should walk away from planning and prudence. Doing what Wall Street wants, pretending that we can predict, time and outsmart the market. Is this rational? No. Will this probably lead to financial success? Almost positively will not!

See I think we feel that the world owes us retirement, freedom the ability to do whatever we want……. why? 80 years ago nobody retired, they died. Retirement is a new social phenomenon. It is not owed. It is not God-given. It is something that we have marketed as the American dream in recent years. The majority of people in the world do not get to retire why do we as Americans think it is our birthright. Is it possible? Yes. But we have to work for it. We have to plan. We have to start saving early, consistently and have a long-term focus so that we can retire. Yet so many people get to retirement and have not saved enough, did not control their spending and find themselves not able to do what they want.

The biggest ingredient to being happy financially is to learn to be happy with what you have. If you always want more, want to retire earlier than you can, compare yourself to others what is the likelihood you will be happy? The best way to accumulate wealth is to be happy with what you are and what you have. Otherwise we get into a cycle of spending and buying because we feel that that will make us happy. This leads to being a Moneyholic!

Have a plan; be happy with what you are or what you have attained. We’ve all been born with different financial gifts, opportunities and rewards. Some of these we have created but ultimately happiness is about what’s important in life not what money can do and the unrealistic dreams that come from focusing on money goals rather than purpose in life.

Wayne von Borstel, CLU, ChFC, CFP®, MSFS
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.


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