Goals & Values

Coffee cup on calendar

The What and Why of Your Wealth Management Strategy

It was Mark Twain who said “I can teach anybody how to get what they want out of life. The problem is I can’t find anybody who can tell me what they want.” He was speaking about the lack of direction that exists in most people’s lives and how they could benefit by taking the time to determine what they want. I have seen this lack of direction in the investment portfolios of individual investors for my entire career. Most investors have never formulated a plan so they accumulate financial products from various salesmen over a period of years and end up with random mutual funds, insurance policies and stocks that are not working in harmony.

As I said in article one, salesmen focus on either alleviating an investor’s fear or appealing to their sense of greed. In this class we do away with that nonsense and establish your wealth management strategy based on your values and goals in balance with the lifestyle that you have determined you want. With this properly in place the decisions regarding which investments will work best to satisfy these goals is much easier.

Your values and goals are vitally important to the proper development and ongoing maintenance of your wealth management strategy so it’s worth defining them at the start. For our purposes, personal values are the traits or qualities that are considered worthwhile; they represent your highest priorities and deeply held driving forces. Compare that to a goal which is defined as the desired result a person envisions plans and commits to achieve. To help differentiate the two concepts consider the short list of examples of each.

Values and Goals Diagram

Note that the values listed on the left are not necessarily aligned with the goals on the right.  Each column is simply an example of values or goals.

By examining the list above it becomes clear that goals represent what an individual may want, and that is very important, but values represent why it’s important, and the why creates the solid foundation of the wealth management strategy. With values properly understood the goal actually has purpose. It’s worthwhile and it holds our interest. Understanding your personal values also contributes significantly to motivation which makes the likelihood of sticking with and achieving your goals more likely. And it makes it exciting along the way.

Determining Your Values
To help you determine your personal values click on the Values Cards link and print your own copy. Cut them apart as on the dotted lines and follow the instructions. In addition to the cards with specific values listed I have included six blank cards in case you have particular values that are not represented in the deck.

I feel that couples should complete this exercise separately and then compare answers afterwards. Take a few minutes to place the cards into the following three stacks: ALWAYS IMPORTANT; SOMEWHAT IMPORTANT; NEVER IMPORTANT.

Once you have completed this task grab the pile of “Always Important” and set the rest aside. When finished you should have anywhere from five to fifteen cards in your hand. Now prioritize these from most important to least important. All of the cards in this stack will be part of your wealth management strategy but the top three or four will likely be the driving force.

I defined the word values above but it is important to understand that there is no strict definition of specific personal values because the definition is personal to the holder of the value. I make this distinction because freedom, personal growth, security etc. can mean very different things to different people and that’s just fine. If you wish to include your personal definition feel free to write any notes you wish on these values cards.

Words and terms on business

We are developing your personal wealth management strategy and this is step one. I would like you to take out a blank sheet of paper and starting in the upper left hand corner write your entire list of values in a column from most important on down. When finished, please circle the list and write the number 1 above it. There are several steps in this process and every step is important so make sure you complete each step. When complete they will make up the outline of your personal wealth management strategy.

Establishing Your Goals

The next step is to establish your personal goals. As you start developing your goals consider how the different values will impact the goals you wish to accomplish. For the person that views personal accomplishment as a primary value the goal of retirement isn’t on their list because they will probably be working at something productive their entire life. For the person that has family high on their list caring for an elderly parent will seem like an expectation or even a privilege where it may seem like an obligation to someone that values freedom and independence. There is no wrong answer but once these are aligned the true value of your effort will be achieved.

As we begin establishing your goals there should be very little consideration given to cost, timing or level of importance I just want you to create a list of goals that feel important to you. We will get to the details and the reality of the goal in the next few steps but for now I want you to consider what you really want.

Click here to print out the Major Goals Worksheet . Use this to organize your thoughts or just take out a blank sheet of paper and start writing your goals. The items listed on the Major Goals Worksheet can be a starting point, but feel free to write any goal you can think of, from a new pair of shoes to funding a new business school at your Alma Mater. For some, this list will be short and only take a few minutes and for others it will take days or weeks. In any case please be patient. When you are satisfied that your list is complete, look at the list and circle those items to which you are willing today to commit your time, talent, energy and resources. Evaluate this list in relation to the list of your values. If they are not in line, slow down and work it through until everything matches up. It’s important to remind yourself during this step that values don’t change to accommodate goals, it’s the other way around. Values are the foundation and goals are a by-product. Once the list of goals is complete write the list to the right of values you created in step one. When completed circle the list of goals and write the number 2 above it.

This is the point where couples need to come together with their individual lists of values and goals and develop their joint list. In my work I find that couples will have many of the same values and goals. Where they are not in line don’t worry, it’s normal to have a few values and goals that are individually directed.

Realistic Potential
Now it’s time to start dealing with the reality that I suspended earlier. For investment goals to take shape they should include these five characteristics: personal, specific, realistic, measurable and time certain. Now it is time to add those elements. This level of clarification is necessary so we can determine how much the goal will cost immediately and in the future, and with that information we can determine if the goal is feasible given our level of assets and funding. Once we have determined that the goal is realistic we must be able to track progress as time goes on, and for that we will use tools that come much later in this process. For now we need to be satisfied that you have completed your list of values, paired it with your list of goals and have provided as much detail as possible.


Highlighter underlining goals


We have all heard the saying “The devil is in the details” and when it comes to your wealth management strategy those details are very important. Without details your goals may as well be called a wish. You will want to know how much your goal is expected to cost now or in the future. Also, will your goal require a lump sum payment, a number of payments over a specific period of time or periodic payments indefinitely? I find it helpful to provide as much written detail as possible on each goal.

To continue with this project I have created the Extended Goals Worksheet. Click on this link and print one worksheet for each goal and answer the questions as they apply to the individual goal you have selected. When completed attach all of the sheets to the sheet where you have listed your values and goals. We will be using these worksheets later when considering the realistic potential of your personal goals.

In this article we defined personal goals and values in a general sense, and then determined your specific values and goals. These form the foundation of your wealth management strategy. In the next article, “‘Meet the Smiths,” we will introduce you to a fictitious couple named John and Betty Smith. We will use their circumstances to develop your definition of financial independence.

I always appreciate your questions or comments so feel free to contact me at Bob.Bancroft@WTLcourse.com

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