If you were to ask a random group of strangers what being successful meant to them, you’d probably get a wide range of answers: having a nice car, owning a mansion, being part of a loving family, calling yourself a CEO, etc. And if you ask them more specifically about their financial success, I’m sure many of their answers would remain the same. For many people, their success is measured in material goods and titles.
However, we measure success a little differently. We believe that the correct way to measure success in wealth building is to gauge whether you remain on track to reaching your desired wealth goal in the planned time period, not the actual average annual rate of return you achieve. It’s not necessarily about what car you have in the garage or the letters on your business card, but how you’ve managed to stay on track to achieve your long-term financial goals. Sophisticated investors recognize that anything else is just a distraction.
Whether your goal is to be independent by a certain age or to be earning 6 percent a year; there will be years you’re going to be above that and years you’ll be below it. What matters is that you are achieving your financial plan at the least possible risk. If you’re sticking to your financial plan and working toward your end goal, you’re a success. It’s easy to get distracted by bright and shiny objects or to think it’ll be okay this one time to only put $10,000 into savings rather than $12,000. And, while yes it will be okay this one time, it’s important to make sure that these actions don’t become habits. If so, they’ll veer you off course of your financial roadmap, which could add years or more work to your long-term plan.
It’s important that you’re able to enjoy your present life and not be living for the future, however there are ways to make that possible: where you can live the life you want both now and in the future. And many of those ways start with a strong financial plan that you are able to maintain. If you’ve got that in place, you should be able to successfully steer your finances.
For more information about how to make your financial and wealth management a success, visit tswealth.com.