Step Inside Your Financial Comfort Zone

This blog is courtesy of Russ Thornton of Wealthcare for Women.


“Life begins at the end of your comfort zone.”

You may have heard this quote before or seen it on one of those motivational posters.

If you search Google for “comfort zone quotes,” you’ll find no shortage of pithy advice about the benefits of getting outside your comfort zone.

This advice is fundamentally about breaking your routine, getting out of a rut, trying something new, and generally forcing some level of discomfort upon yourself and in your life in order to uncover new opportunities.

I can see some wisdom here and don’t think any of us want to spend our days simply going through the motions.

But does this same concept relate to your money?

Should you expose not just your life, but your financial resources as well, to discomfort in order to really begin living?

I don’t think so.

In fact, I believe the opposite to be true.

Your best life is waiting for you inside your comfort zone.

Let me explain.

There already seems to be plenty of financial discomforts to go around.

Many people don’t have much money and those that do don’t talk about it on the grounds of social decorum. Money is generally considered an uncomfortable topic of conversation.

So I don’t think we need to add any unnecessary discomfort to money matters in our lives.

But what if you could actually live your best life and keep your money matters in order by staying in your comfort zone?

Here’s how this works . . .

As part of my Wealthcare financial planning process, instead of focusing solely on a singular set of your goals, we instead split every goal into two unique flavors of your goals: Ideal and Acceptable.

With a singular set of goals, like retirement age, retirement spending, a travel budget, education funding and more, your plan either works or it doesn’t. It’s almost like your financial plan is balancing on a tightrope. Or a razor’s edge.

One hiccup in the market, your life or the lives of those that are important to you, and your plan becomes null and void. Back to the drawing board to start over at square one.

This isn’t financial planning.

It’s a series of individual financial plans. One after another, hoping this next plan will have a longer shelf life than its predecessor.

And it can also convey a false sense of precision. With a singular set of goals, you could be expected to believe that as long as your plan is on track that there’s little that could change a comfortable and confident financial future.

Until, of course, life happens.

Financial planning is a contact sport. It exists at the intersection of your money and your life.

And it’s about more that just your investment portfolio and the investment markets.

Thankfully, I have an alternative to the uncomfortable reality of basing your financial plan on a tightrope of singular goals.

And as it happens, my approach to financial planning lives – thrives even – inside your very own, personalized comfort zone.

Creating your financial comfort zone begins with a different approach to goal setting.

Instead of a singular set of goals, we’ll develop an Ideal and Acceptable version of each.

Fox example, I would ask you when you want to retire, and you might say age 60. But instead of moving along to your next goal, I would ask some clarifying questions.

My next question would explore if you have any interest in retiring prior to age 60 if you could do so with comfort and confidence?

Maybe you tell me you’d love to retire at 55 if you could, but you doubt it’s possible. In this exercise, a little doubt is OK. Remember, this is an IDEAL goal.

But we’re not done with discussing your retirement age because next, I’ll ask if you’re willing to work beyond age 60 if it meant you could accomplish other, perhaps more important, goals.

And maybe you tell me you could possibly work until age 62, but not a day longer. Age 62 retirement isn’t your goal. It’s an acceptable version of your goal.

And we repeat this process for every goal that’s important to you and your family. Even goals that might feel more like wishes or dreams.

We’ll establish Ideal and Acceptable versions of:

  • Retirement age (see example above)
  • Retirement spending
  • Education planning for children, grandchildren or others (including yourself)
  • Travel spending
  • Charitable giving
  • Investment risk (you don’t have to take risk just because you’re willing to tolerate it)
  • Leaving a financial legacy behind to family and/or organizations
  • Supporting aging parents
  • Downsizing your home in retirement
  • Supporting grown children
  • Starting a business
  • Selling a business
  • And the list goes on

Not only do these Ideal and Acceptable conversations lead to a more personalized plan, it creates a true discovery experience to help you identify and clarify the things, experiences, people, and organizations that are truly important in your life.

And this also avoids the goal tightrope that traditional financial plans revolve around.

Now we have a range of goals between Ideal and Acceptable. We’ve established early in the financial planning process goals that you’ve perhaps only dreamed about in the past. And we’ve balanced these dreams with less aspirational, acceptable goals that would still make for a comfortable life for you and your family.

Your financial plan no longer balances on a tightrope. It now lives and breathes inside your very own financial comfort zone which is the range between your Ideal and Acceptable goals.

And this comfort zone gives us more choice and flexibility.

It naturally supports ongoing financial planning which depends on regularly updating, reviewing and adjusting your plan. This is in stark contrast to a plan that no longer works and calls for the creation of an essentially new plan.

Financial planning is all about trade-offs.

Save more now so you spend more in retirement, retire earlier, take less investment risk, or all of the above. And having an established range of goals which define the borders of your comfort zone facilitates a better understanding of these trade-offs.

The market goes down?

Then we’ll have to move one or more of your goals toward your Acceptable values.

The market goes up?

This provides an opportunity to move one or more of your goals closer to your ideal values.

These are just a couple of quick examples. The investment market (and your portfolio) is just one of many factors that can necessitate adjustments among your Ideal and Acceptable goals.

In fact, my primary role as your financial advisor is to create a “recommended” plan that gets you as close to your Ideal goals as possible while keeping your plan squarely in your comfort zone of sufficient confidence given the uncertainty of the future.

So despite the quips and quotes about your life beginning outside your comfort zone, when it comes to your financial plan and your future, I believe your best life resides inside your personal comfort zone.


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