Like many things in life, money is what we make of it. But what’s a true worthy goal? There is so much noise surrounding finances – what to have and buy, what to invest where, how much to save… and most of these goalposts will change several times in the next few decades. It’s a bit like the surface of the ocean – every which way the breeze is blowing at that moment is going to affect the surface of things, and if you only ever look there then you might feel tossed about by wildly different sways and motions every few minutes.
Look deeper. What’s really valuable in an ocean? Let’s imagine that you are going on a dive – what things are you really aiming for? When you’re planning out your financial wellness for the rest of your life, it’s a deep dive that isn’t concerned with the ‘waves’ of the next month or so that is the surface. What do you really want?
Visibility is everything on a dive. You can be surrounded by the most mesmerising creatures and underwater seascapes and not even know it, with poor visibility and too much litter and clutter.
While the ocean visibility is something frustratingly out of one’s control, finances are another matter. You can determine how clear-eyed and long-term your ‘finance goggles’ are by looking at your thinking and clearing it up.
Some think the ability to be able to afford this or that is the biggest fruit of a good financial plan – it isn’t. Being able to see what will and could happen to your financial future is the most powerful advantage of a financial plan. Just like those sea creatures, you may have all the money and resources around you for building a great financial future and miss seeing the opportunities if your view is clouded and cluttered.
This links in to visibility a lot, but is somewhat different. Visibility refers to how well you can see, transparency refers to how open other things around you are. Both are important if you are going to have a safe and stress-free financial journey through life.
Having a financial advisor and partner who you trust is the first step. Don’t invest your money into anything you don’t understand, just like not diving into an underwater cave that you haven’t seen a map to or read commentary on. Have your heart set on trading stocks? Then take time to understand the stock market first – and to just think you understand it. Anything you don’t know inside and out, from property to unit trusts, has the ability to surprise you and not in a good way.
Insist on easily understandable and user-friendly products and don’t feel bad or stupid for doing so, the current can sweep you away if you don’t consult the experts.
One thing every dive needs, non-negotiable no matter what? A diving buddy. Oceans are dangerous, even for professionals or people who have been diving a hundred times. Most people respect this, but don’t understand that finances, like the ocean, can turn quickly and experience severe conditions based on external factors like geopolitical uncertainty or headwinds (a little financial joke for you there).
For this reason you need a financial professional with you on your dive. Not only can they provide expert advice, they can also be your blind spot and tell when a storm is coming that you may not be able to see. They can help you keep your boat anchored whilst you dive into deeper waters with a safe place to return to.
When you are on a beautiful ocean dive, it’s bound to mar the experience and the beauty around you if there is litter everywhere. It’s the same with your finances – bits and pieces of non-essentials tangled up in the scenery can ruin your fun.
We talked about the noise of finances earlier – urgent but not important urges like ‘I want a new car by the end of the year’, ‘I want that holiday’, ‘I only have budget for these 10 things this month’.
While these things aren’t rubbish, exactly, they’re not your goal. Having enough money this month isn’t your goal. Even having the money for a well-deserved overseas holiday in two years’ time is not a goal. If you look at these bits and pieces, they will affect your visibility because you can’t see the forest for the trees. What if, while you’re so busy looking at cars and holidays, a shark comes along?
Warren Buffett once famously told his pilot, Michael Flint, to write down his top 25 priorities and write ‘avoid at all costs’ above everything below item 5.