A True Story

I was online in a financial planning forum one day. One of the postings was from a young gentleman who lived out west and worked as a ranger for the U.S. Parks Service. Simply, he wanted to know how much he would have to save each year to have $5,000,000 at age 70, his planned retirement age. He indicated that he was 29 years old, made a modest salary, but was willing to sacrifice to reach his stated goal. There were lots of answers already posted. Some replied with the facts: “If you invest aggressively and average X% return per year, you will have to save $X per year to reach your goal.” Others noted, “But what about inflation? Do you want to have $5,000,000 period or $5,000,000 in current dollars?” One cautioned, “Before you invest aggressively you need to assess your risk tolerance to be sure that is a prudent course of action for you.”

Certainly, all of these are good and valid comments and address issues we deal with everyday in our practice. But I smiled because none of them seemed to go to the “heart of the matter.” I wrote “Why do you need $5,000,000? Do you understand why this is your goal? It seems like you are willing to live very frugally for the next 41 years to achieve this goal. Perhaps you should examine your goal a little more carefully before you proceed with any plan. Indeed, I can only hope that you will find a path that promotes your current well being while providing for your future.”

That’s what we do. That’s what we encourage our clients to do. Ask not only “Where am I going” but also “Why am I going there?” So often we all get trapped in our idea of what our lives “should” be and “should” look like to others that we plan for a future we don’t even really want. And we often live today consuming endlessly in search of satisfaction. Such consumption can be detrimental to our well being, both financial and spiritual. Together we can do better than that.

–Bobbie D. Munroe, CFP®