Ep # 63: How To Plan When You Don't Have A Well-Defined Goal.

Benjamin Haas |
  • How do we go about leading people through not having a well-defined goal? - 1:46
  • Importance of finding your purpose and focusing on good habits - 4:16
  • Probing questions during the planning process to understand goals - 9:44
  • Finding and recognizing small wins during the planning process - 12:10
  • Our tagline: Aligning your values, vision, and wealth - 14:29




Listen on Spotify

Watch the full video on YouTube:

Full Transcript:

Benjamin Haas  00:03
Hi everyone and welcome to A/B Conversations where we will help you CFP your way out of it. A podcast where you get into the minds of a couple Certified Financial Planners on how we think and feel about everyday financial planning questions and what should really matter most to you.  A healthier financial life starts...now!

Adam Werner  00:22
Happy New Year!

Benjamin Haas  00:30
Happy New Year to you too, Adam. We're twinning today for those that can't see us on screen on video here. It's always nice when we walk in the office and we're wearing like the same exact thing.

Adam Werner  00:40
It happens way too frequently, actually. 

Benjamin Haas  00:46
Yeah, especially now that we're not always in the office together but welcome back. I feel like we haven't done this in a month. 

Adam Werner  00:55
It may be close to that so this may be a dud for our listeners. 

Benjamin Haas  01:01
Well, thank you for validating my feelings, too. So let's jump into it. It's a brand new year. I think most people have the turn of the calendar year is one of those nice benchmarks to go - okay, New Year, what are my goals? I think we're going to kind of talk today about goal orientation and this whole idea that if you really want to achieve something, you should have these really well-defined goals. There's the SMART acronym. 

Adam Werner  01:36
SMART goal. 

Benjamin Haas  01:37
Specific, Measurable, Attainable. 

Adam Werner  01:41
Is that what that is? I don't remember. Actionable. Realistic, time bound. 

Benjamin Haas  01:46
Time bound, right. So that sounds great. We've kind of been brought up in this world that yes, this is how we need to coach people. Figure out what the goal is and then you can align everything but what if somebody doesn't have a well-defined goal? Like how do we go about as financial planners? How do we go about leading people through that? 

Adam Werner  02:07
Yeah, I'm trying to think, you know, New Year, like New Year's resolutions that I think many people have. It's the difference between saying, hey, I want to lose 15 pounds versus I just want to be healthier. It can be through that lens that doesn't necessarily need to be super specific, as long as you're headed in the right direction. Being healthier may lead to losing those 15 pounds, whatever that may be. I think there's a shift in our industry and I like to think that we're not completely lagging in, you know, in the dark when it comes to these shifts for clients, in that we've met with plenty of people that don't necessarily have well defined goals. In the past, I think that's made it somewhat difficult to do our job but I like to think that we are also evolving to get much better at being able to align the underlying purpose, the underlying values that somebody may have that can still point them in the right direction, get them to an end goal that may feel appropriate without actually having a perfectly defined endpoint in mind at the beginning.

Benjamin Haas  03:29
God, I love the way that you put that! I'm glad that you started there because we need to get people to know they can work with people like us, if they don't have those goals. In some ways, tell them it's totally okay that you don't have those goals and by the way, in certain ways, we don't want you to have that too well-defined goal because we also know that you work with people that get so fixated on that goal. Yeah, they kind of pigeon themselves into being so results-focused and the results, I think you said it well, the results are such a lagging indicator to the things that you're doing to get there. It's the habits that lead to reaching something. So yeah, if your weight is a lagging indicator to what you're eating, right?

Adam Werner  04:15

Benjamin Haas  04:16
Your net worth is a lagging indicator to your saving habits. So it's okay to not have that goal. If you are on the front end, kind of developing the good habits, the good identities that are ultimately going to lead you to whatever that end goal is, even if it's not well-defined. 

Adam Werner  04:35
Yeah, and through a lot of the other industry experts that we follow or pay attention to, there's one in particular that uses what he calls and it goes by many different names but the idea is a statement of financial purpose. So like we would with anybody before we would invest for them, we want to have kind of our investment policy statement. How are we going to approach our investments, it's a similar thought on how are we just going to approach pretty much everything in their financial life? What is the purpose? What is the “why” that kind of drives everything else in someone's financial life, trying to understand what's important to them and it may just be as simple. One of the examples that was thrown out there from a retired client was, I don't want to be a burden to my kids and I would love to be able to see them enjoy their inheritance while I am living before I pass away. Just looking at every, not every decision, but potentially, right, big financial decisions, looking through that specific lens can very easily alter course if that decision is not necessarily aligned with those underlying principles. More often than not what we see right goals can change very quickly. Someone could say I want to retire at 62 and then COVID happens in March of 2020 and they say, you know what, I'm only 59 but I would really love to retire right now. That's very different from those underlying values I think for most people that are just very, very broad. Time with family, giving to charities, whatever those other like big picture things are that can be the guiding light that helps us navigate those financial decisions.

Benjamin Haas  06:28
Yeah, it is the values. It is the things that make them feel. It is the goals, if we can make goals, the mathematical modeling, if we can just put that in that camp. There's not a lot of people that come to us and say, I want to retire at 62 with this much money, I'm going to need to pay this in taxes, I have all these formulas done. Great. That's calculator stuff. That's not the human side to how you're going to think and feel on a daily basis. That's why the Statement of Financial purpose, as you said, is about identifying, like, what is somebody's “why.” The why behind the habits that they would create or the decisions they would make. What is important to them on and in their daily living in the things that they care most about is absolutely going to shape those goals. I get it but the definition of those goals is completely irrelevant. If we don't really know the values, how they make decisions, and what's going to motivate them. What are the systems that they're going to put in place to let that be the fuel behind the actual decisions that they're making?

Adam Werner  07:36
Yeah, there's a great quote that I think, perfectly sums up the end of what you just said there and it's, you know, the last thing that you would want to see happen in your life is to spend your entire career or life climbing a ladder, just to find out when you got to the top it was leaning against the wrong wall. 

Benjamin Haas  07:55
Yeah, right. 

Adam Werner  07:56
And that one, for me, it just kind of a slap to the face of yeah, really, to your point, the having good habits, aligning those things in your life with your underlying values and purpose and the why. It's a pretty powerful thing and I'd like to think that we can play a role in that process. 

Benjamin Haas  08:23
 I guess the issue, though, if we can be go back to the side of why goals are important. I think there is the need to have people motivated to something and that's because just having the habits, just identifying as a savior, a saver. 

Adam Werner  08:42
Do some editing on this podcast. 

Benjamin Haas  08:44
Yeah. Well, it's not even Sunday, I guess I had Church on the mind, I don't know. Identifying as a saver, we have talked before about how it is so difficult to like commit to habits when you don't see results quickly. We all know how this goes, we'll go back to hey, I want to lose some weight. You eating healthy for one day and not the next. You're not going to see results of weight loss right away. If I go to the gym three times next week, I'm not all of a sudden going to be perfectly fit. If I spend an hour trying to learn another language tonight, I'm not going to be able to speak it. There is just the slow grind to reaching a goal, that it's not just the values, there really does need to be some motivation to make those sacrifices and building those habits kind of seem worth it. And I guess that's where we do want to start with the end in mind and match that up with the values or the habitual things that need to be put in place.

Adam Werner  09:44
Yeah, so on top of that, I think we often have conversations with people that may have a general idea on what they would like to see happen but just don't have the context and aren't even sure of what's realistically possible. I can have the goal in my head of I want to retire at 65. I don't know if that's possible or not. I think a lot of our role is to start to bring some of that perspective into focus and our job is also to ask a lot of those probing questions on the front end to really find out. Okay, why 65? What are they actually looking to accomplish? Is it just to get out of work? Or is it to spend more time with XYZ? And then if that's the case, then again, it's just question after question. We can really dive down into what is that truly important factor or factors in someone's life to help drive some decision making, and to your point, maybe it is shifting or developing habits that will lead to that.

Benjamin Haas  10:57
Yeah, and maybe what I feel like we've gotten better at and this is admitting that we're kind of learning and trying to build, you know, better skills around this too. It's to help be that motivator for people by giving them the encouragement to again, not look at goals as something that's like restricting your happiness. It's such a long off thing, I'll be happy once I get to here, I'm making a sacrifice, right? I'm saving today for the future. The problem with that is you're always putting off that happiness. Where if we're able to focus more on the values of why you're doing what you're doing and I think you give yourself permission to love the process and be happy with the process, not necessarily just where it's going to lead. It also is going to help people when to your point, COVID happens now, there's some sort of pivot. Well, you're still identifying as a saver, a giver, a provider for the family, whatever it is. You're identifying with the process that's going to get you there and I think it just leads to more fulfillment in having a process put in place. 

Adam Werner  12:03
Yeah, yes. So what else you got? 

Benjamin Haas  12:10
I think the other side of that is to try to find the small wins in the process and I just go back to okay, I don't have a well-defined goal. Fine, but even if you did, it's our job to kind of break that down into more bite sized pieces and little milestones. I know we've talked about this before with resilience and wanting people to kind of like be kind to themselves when things aren't going well. Continue to look big picture, keep the goal in mind but if we're kind of talking to the other side of that, financial planning is an ongoing process. It's not let's build the plan for this goal 20 years from now. How many times do you and I go back to that plan and adjust it?

Adam Werner  12:53
Yeah, a lot. 

Benjamin Haas  12:54
It's an ongoing thing so find those measurable things. Even if you don't well-define the goal. Hey, this was a good year. You know why it was a good year, because we were able to accomplish X, Y, and Z. And these are important things even if they're not the big picture thing that you're focused on. Those small habits are going to add up to long term success. 

Adam Werner  13:18
Yeah, so maybe the last note that I had here was just aligning what people say they would like to see happen with the habits or the steps that they're taking to get there and we see many times that we talked to people that want to retire early. By early I mean, before 59 and a half when you could get access to a retirement account but are still saving only in retirement accounts that have those, you know, time bound restrictions. So just being able to align, even if it is not a well-defined goal with a specific target age, but it is more general, I want to retire before a certain you know, before 59 and a half as my target. There are many different dominoes that would have to now happen to be able to make that a reality. So I think for me, it is just aligning. I mean it's in our tagline, right? Aligning your values, your vision, and your wealth. We were right that many years ago but I think that's a big part of what we hope to do for people too.

Benjamin Haas  14:29
Yeah, so I guess the moral of the story is, it's all three of those things and that's why we say it has to be and I'm glad you brought that up. It has to be aligning these things. It's just when we say values, maybe people think about that differently depending on what kind of context they have around that word. But like yeah, I look at that as one of the things that you identify with. They are the guiding stars to how you would make decisions. I value time with my family. I value being outdoors. I value preparing for the future and that's why I'm a saver not a spender. That does need to of course go along with the vision that somebody would have for the future. Okay, now that's the goals. I get it and of course, the wealth side, we could talk at nauseam about all the nuts and bolts that make up a financial life. But to truly put somebody on the right path, does it need to be the well-defined goal? I hope the moral of the story today is no. I think it's more important that you're aligning your behaviors to the values that matter most to you, knowing that those habits are going to just afford you the ability to probably do the things you want later in life.

Adam Werner  15:39
Perfectly said.

Benjamin Haas  15:43
Well, happy 2022. I hope people are thinking big picture about what they want to get out of the year. But yeah, in the absence of that, let's just develop some good habits.

Adam Werner  15:59
Agreed. That's a good plan.

Benjamin Haas  16:02
We'll see you out there. 

Adam Werner  16:04
Okay, see you next time. 

Benjamin Haas  16:07
Bye.  Hey everyone, Adam and I really appreciate it. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you. Consult with your attorney, your accountant and financial advisor or tax advisor prior to making any decisions or investing. Thanks for listening!

Tracking # 1-05231817