Start 2013 by asking "Why?"
Most of us have forgotten life's shortest and most transformational question: "Why?"
As children we've learned important life lessons by asking "why?" almost nonstop until we think we're smart enough (usually when we become teenagers!).
Perhaps we have become so fatigued at hearing our younger siblings, children or grandchildren ask "why?" that we tend to shut it out of our lives - I believe to our detriment.
The big resultant tragedy is that we fail to ask "Why do I want to plan for a successful retirement?" As a matter of fact, we get downright unnerved when we're forced to answer that question.
Let's do a small case study with a young couple, John and Mary.
Mary: "Richard, we need a retirement plan."
Richard: "Why?" John: "Umm, because we want a successful retirement?"
Richard: "That's great - would you mind telling me why?"
Mary: "That's a strange question. I suppose because we all have to retire one day."
Richard: "Now that mandatory retirement is practically illegal and you don't have to retire, is there another reason?"
John: "Richard, aren't you supposed to help us to plan for retirement?
Richard: "Absolutely. Sorry to be so obstinate with the WHY question but I really need to get to the bottom of why you want to stop working for money and start having your money work for you. Let me rephrase the question: If money was no issue, what would inspire you to wake up early each morning?"
John: "That's easy. I'd actually love to sleep in! My passion is night-time photography. Whenever I can, I'm outdoors at 3 a.m. with my camera gear doing time exposures or capturing the sunrise. I've got a number of stock photo agencies interested in my work and I'd like to pursue this as a business.
We'd both also like to rent an apartment in a different place in the world every year and try to learn a few new languages."
Mary: "I'm an early riser, so I'd probably hook up with John on the way back from his crazy photo safaris, enjoy a walk on the seawall together, and while he's catching up on sleep I'd spend the rest of the day volunteering for a program in town that provides breakfasts and hot lunches for children and families at risk. We'd also like the flexibility to spend more time with our children and their families.
Richard: "Could you tell me why these goals are so important to you?"
John: "Vetter, you're annoying! It's because we want to fulfill our passions and leave a positive mark in this world - okay?"
Richard: "There you go! Sounds like you've really nailed down your "Why?" Was that so difficult?"
Once we answer the "Why?" question it becomes much easier to design a financial plan that gives it fuel.
The opinions expressed are those of Richard Vetter, BA, CFP, CLU, ChFC.
Richard is a certified financial planner and owner of WealthSmart Financial Group in Richmond.