Define Purposes Before Set Your Goals


Presentation Description

Purpose endures and is much more than a goal. It establishes the context within the Financial Planning process takes on its meaning.


Presentation Transcript

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Define Purposes Before Set Your Goals Most people have not really thought through the purpose of money in their lives. They are too busy in making spending and worrying about it. While asking these people in the affluent middle-class the so-called mass affluent what is the specific about the purpose of their money in their life They tend to talk about things. They usually come back with such comments as to buy a dream car or house pay for the children’s college have an Rs2 crore net worth at retirement or travel the world etc. But these specifics are not purposes. They are merely goals or ways to spend money once it’s acquired. Each goal is tangible temporary easy to set and easy to change or drop. Such goals also are what many people give as the reason for investing.

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A purpose on the other hand goes much deeper. It’s not an end. It’s a direction you would like to take over the long haul with specific goals serving the milestones along the way to help monitor your progress. Purpose sets the context within which priorities are determined. To provide a better sense of understanding the difference between purposes and goals we set the example if you are in New Delhi and your purpose is to head east Mumbai could be a goal. Once in Mumbai you still can go farther east. Similarly if your purpose is to become wealthy having Rs 10 crore could be a goal. And once that goal is attained you can set higher goals. It’s vital to have both goals and a purpose or vision. So you have to understand that why you want to have money comes first. Once that’s clear it becomes the context in which to create a meaningful financial plan with set goals and priorities. Putting purpose first makes decision making much easier. For example if you want Rs3 crore in your retirement plan at the of age 60 that’s goal. If you want to be free from money worries by retirement age that’s the purpose. To have well-educated children is a major purpose of money. A related goal within that context could be to save the money necessary to send your children to college. So purpose and goal are interlinked which makes it hard to make out a difference between the two. Purpose which is all about direction is that something that influences goals. Unlike goal purpose is broader and deeper. Our goals may be the set of our sail but at some point in time we need to decide where we are sailing to. To be truly fulfilled we need to have a purpose in at least 3 areas behind our goals viz. vision security and peace of mind. Vision of course being the most important. All goals need a destination. This is why I cant say enough about the importance of our vision statements. Taking the time to write a vision statement forces us to have a purpose. Without a purpose we are just wandering aimlessly through life hoping something good will happen. Take a classical example of a couple having a good amount of life insurance and disability insurance. They have a healthy emergency fund. They have a balanced investment Planning portfolio invest monthly and automatically. In fact it may

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be quite boring. Yet it gives them a great deal of peace of mind and comfort knowing that with each financial decision they make they are becoming more financially secure and that is the real reason behind their financial goals. Purpose endures and is much more than a goal. It establishes the context within the Financial Planning process takes on its meaning. I finally know what distinguishes humans from the other beasts: financial worries. – Jules Renard Read More: SEBI Registered Investment Advisor l Insurance Planning l Best Taxation Planning Services

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