Tim O'Rahilly Life Coaching

Posts Tagged ‘finances’

Wealth Health #6: The Financial Journey

OK, we’ve done enough analysing in recent blog posts that you should now have an adult, realistic view of your current financial state. You will have also recognised your financial personality and should be well resourced to start your future financial journey.

Any planning exercise must begin with the setting of goals. Aspirational, inspirational, real goals.

What do you want money for?

Have you seriously thought of what it would mean to be truly rich?

Maybe it’s time to revisit the Wheel Of Life. Consider what having wealth would mean in each of those areas of your life: relationships, health, career, recreation, family, spirituality etc.

It is often said that if you wish to be a millionaire, then you should start by acting like one. That can be easier said than done, but look at those areas of your life again. Consider how you might start to create those improvements now.

In Tim Hales’ Smarter Investing he borrows from Maslow’s famous Hierarchy of Needs to present a pyramid model for setting financial goals. Start with the bottom foundations made of current needs: earnings, savings and debt repayments.

On the next level up the pyramid we have your retirement plans. On the third level are the solid future goals around things, experiences, college, weddings etc.

At the top level we find the long-term goals, such as legacies which are further in our future. It should be clear that the upper levels stretching into the future need good solid foundations beneath them.

Try to identify the big milestones in your own financial future: childcare, house, big trips, weddings, parental care, retirement. Trying to choose a date or age in your future where these might occur.

In these days of financial constraints, one of the most worrying aspect of many people’s financial planning is how to manage changes to their pension facilities.

“The question isn’t at what age I want to retire, it’s what income.” – George Foreman

Retirement planning may not be an end goal as such, but it surely ranks high in the important stops along your financial journey. We are destined to live longer than our parents did. We must plan for that.

On average, men live for 17 years after retirement, while women live for 20 years.

During the 1960s, spending focused on leisure, houses, travel and transport.

Since the 1970s, spending has focused on health care and domestic help.

This is a huge area to consider when we will look at it in some detail next time.

Let’s be prepared – or, as Warren Buffett puts it, “Someone’s sitting in the shade today because someone planted a tree a long time ago.”

 

 

Wealth Health #3: Beliefs About Money

Previously, we have looked at how to gain some clarity about the reality of your personal finances. Now it’s time to delve a little deeper than that in order to expose your underlying beliefs regarding money. This is important, because your beliefs may well be having a greater effect on your financial decision-making than any set of real facts regarding money.

What are some of the things that you are saying about money? What are you saying which may not be serving you well? Which of these common sayings do you use regularly?

  • “Money does not grow on trees.”
  • “I’m not made of money.”
  • “I can’t afford it.”
  • “You can’t take it with you.”
  • “It’s alright for some.”
  • “You can’t take it with you.”
  • “I don’t understand money.”
  • “I haven’t got enough money”
  • “I deserve it.”
  • “I might not be rich but at least I’m honest.”
  • “I work hard, why shouldn’t I enjoy life?”

Most of these sayings have a negative slant to them, so let’s try to reframe them to be more positive, supportive or even motivational.  For example,

“I haven’t got enough money,” becomes, “I have got enough money for my needs.”

Or

“It’s alright for some,” might be reframed to say, “What’s alright for some is alright for me too.”

We seem to reserve our strongest beliefs for those who are richest. What do you say about those who are very wealthy? Would you like to be really rich too? Is it OK to be rich only in certain circumstances? What does that say about your view of being or becoming rich?

What does money mean to you? Try taking a sheet of paper and brainstorming this by just writing words which reflect your beliefs about money.

MONEY =        freedom                      choice              consequences              fun

Sacrifice          pleasure                      pressure          impact on others

decisions

Does thinking about money give feelings of pain or pleasure?

Next time we will try to pin point which financial personality type you are, by uncovering your deep seated FEELINGS about money.