NEWS AND RESOURCES

Financial Planning for March, 2001

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Well, what will it be?
Looking back over our articles in the financial planning section of this newsletter, we noticed there was one glaring omission.

No, it’s not that we haven’t recommended a specific mutual fund or stock. It’s certainly not that we haven’t mentioned income and estate taxes. It’s not even that we forgot to use the famous words all financial planners use - Past results are not necessarily indicative of future results! And like all good financial planners, we have certainly discussed goals, planning and reassessing plans.

But we have forgotten one tiny little item that any planner worth their salt should discuss with you, so now we will ask – What makes you happy?

“Who cares?” asks the college student itching to get out into the world and make a fortune. The factory worker who has been on the assembly line for the last 15 years may have the same reaction. The head of General Motors or any other corporation may also have the same reaction. As far as they are concerned, happiness is making enough money to retire in style and enjoy the grandchildren – then send them home to their parents.

But that’s only the first reaction. If you keep talking to any one of these people, pretty soon you start talking about last weekend’s football game, or perhaps the fishing trip they went on last Sunday. If they have children, eventually you will get into the results of the last basketball or soccer game.

By now, you’re probably thinking, this is all really great to know, but when are we going to get to the part about planning for the kid’s college and my retirement. Read on, the answer lies ahead.

One of the main purposes of financial planning – stated or unstated – is to give you the tools to be happy. Therefore, one of our purposes is to help you attain the tools to be happy, but you must ultimately decide what makes you happy and that is what we want you to reflect on as you read this article.

Of course, we want you to have definite plans and goals for your future. Of course, we firmly believe that one element in the life equation that will help you be happy is financial freedom. But that is only one element. The real question is why do you want financial freedom? Let’s take a look at some of the answers.

I want to retire by the time I’m 55!

We can’t tell you how many people want to retire before age 65. Specifically, they always pick the magic age 55. Really, there is nothing magic about age 55, except it sounds good.

If this is one of your goals, there is absolutely nothing wrong with it, but consider what you will do with the remaining 25 plus years you will live beyond that retirement date. If you are happy doing what you are presently doing, is it realistic, or even wise to quit?

Many years ago, the standard answer for a patient with heart problems was to avoid stress. Hence, if the patient had a high stress job they would be counseled to quit the job. Today, we are learning some people thrive on the action and excitement inherent in “high stress” jobs. For them, to leave such a job for a “less stressful” occupation could be disastrous.

Of course, if you’re not happy with your present occupation, retiring at 55 (or even earlier) may be the thing to do.

I want to be rich so I can do anything I want!

Bill Gates is the richest man in the world. Man, he’s got it all. He controls a corporation that, in large part, affects the lives of so many people every single day. He’s so rich, he rented an island for his wedding reception. Now, that’s rich!

Did you know he still has a board of directors to report to? Microsoft’s past discussions with the United States Attorney General and the attorneys generals of various states have been anything but amicable and the courts haven’t necessarily allowed Mr. Gates free rein in the computer world.

Still, Mr. Gates can generally accept or not accept meetings and appointments with whomever he pleases and it is true that he can probably get his way most of the time. It’s true, money can give you the freedom to set your own pace and, as long as you’re not hurting anyone else, this is not a bad goal.

I’ve got three kids and I want them to have a good education!

We can’t think of a single mom or dad who doesn’t want the best for their children. There are some, we suppose, but we are lucky enough not to know them.

That being said, one of the prime goals of most parents is to be able to provide, or help provide, their children with the education they need to succeed in life. This could mean saving for college tuition, room and board. Perhaps your child or children will be going to school far from home and need transportation. Perhaps your child is not academically inclined, but would do very well in a vocational college.

Whatever educational route a child may choose, someone will have to provide the means to fund that route. Generally parents want to help as much as they can and this may be a savings goal.

The ozone hole is growing by the minute and I want to stop it!

Do you give much to charitable, educational and similar causes? Do you give to your church, mosque or synagogue? Do you even want to support charitable organizations?

We are not here to tell you that you should or should not support charitable organizations. That is purely a personal decision that, on the scale of one to ten in the moral values section of our lives, is a five. In other words, we don’t necessarily think morality requires you to give or not give your money to charitable organizations.

We do, however, think that if you are charitably inclined, it is likely the more you are able to give, the happier you are. This, then, may be one of the reasons you wish to become financially independent – to give some of your money, time, talent or any combination thereof, to causes with which you agree.

I really want to go to Jeffy’s game on Saturday.

Whether you are a parent, an uncle or aunt, cousin, grandparent or brother or sister, you may sometimes find yourself torn between work and family.

Did we say “may?” Change that to “will!” Having a certain amount of financial independence can help you feel better about skipping a meeting to go to a child’s ball game or program. Even CEOs of some of the largest corporations in the world will not allow meetings to be scheduled that would interfere with their children’s activities. Sometimes that’s not so easy when you live from paycheck to paycheck.

I don’t care about work, I will go to church!

Whether it is synagogue, the mosque, church or any other religious event, all too often, we find ourselves torn between attending a worship service and getting a project out. What a relief it is when you can say no to work because you are financially able to do so. What a relief it is to be able to say, “God first,” without having to consider the effect on your pocket book.

In the end…

Financial planning is all about what makes you happy. Sure, we talk a lot about money, investment strategies and similar issues when we talk about financial planning. But if you think about it, what you are really trying to do is to find a way to be happy. As long as what makes you happy isn’t illegal or immoral, you ought to be able to pursue the goals that make you happy.

There is an old song about a wealthy individual who seemed to have it all. Then, one night, he went home and committed suicide. Similarly, having all the money in the world is not going to make us happy – unless that’s all we care about. So, when we get together to discuss your financial plan, be sure to bring along the list of things that make you happy. That way, we will be able to match your personal and financial goals to maximize your chances at happiness.

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