How Do You Define Financial Success?

financial-successWhen I was a kid, if you asked me what I wanted to be when I grew up, my answer was always an artist. Not just an artist, but a rich artist! Of course, most people aspire to be wealthy later in life. I mean whose goal is to be a poor as they get older?

But what does it mean to be rich?

The answer varies from person to person. One million dollars might do it for one person, and making $50,000 per year is rich for another. That’s why I’m writing about defining personal financial success. You have to think about what it means for you. The commercial asked “What’s your number?”, but I think you should ask yourself, “What’s my life’s purpose?”, and then calculate how much it will cost and what you need to save to get there.

I can’t tell you how many financial plans that I’ve done in 20 years, but I can tell you that goal planning is very hard for many people. Investors will do planning without knowing what they want to plan for. In financial planning we have to quantify a goal before we can plan for it. If you don’t know what you want, how do you put a number on it?

So here’s how I think you decide what financial success means to you.

1. Look at Your Life
Really sit back and think about what you want to do with your life. The great thing about being human is you have unique gifts to share with everyone. When you figure out what you are passionate about, this is where the picture becomes clear. Do you have unique talents, passion about a hobby, or enjoy working with a charity? This will be the starting point for figuring out the numbers of what it will cost.

2. Dream Like a Kid Again
I often ask my financial planning clients, if money were not an object, what would you want to be doing? Would you go fishing everyday, sip rum on a tropical beach, or just have a nice garden? Don’t be afraid to really reach and stretch your mind. The more specific you can be the better.

3. Calculate the Cost
Now that you have discovered your dream of sipping rum on a deserted island all day, you can now calculate how much it will cost. This may be as simple as figuring out how much it will cost to supply the island with your favorite libation, or as complicated as running figures to start a business. Either way, you’ll know what your day-to-day costs will be.

4. Develop a Savings Plan
Oh no, not financial planning again! Yep. You have to develop a plan to figure out how you are going to earn or save the money for your island get away. This is where planning will help you figure out how much money to put away for your perfect financial future. In addition, you’ll have to decide what investments will help you reach that financial success.

It will take hard work, planning and maybe a little sacrifice today, but it will be well worth it to reach your true financial success. If you want to reach your financial success, write me at david@lexwealth.com, or call me at (859) 225-2596.