What does it take for humans to accomplish goals of great significance? The answer to this question was recently addressed in a 10-year study conducted by The United States Military Academy at West Point, and the results may surprise you. While the study found that cognitive and physical abilities aid in the accomplishment of great things, it is “grit” or the “passion and perseverance for long-term goals of personal significance” that matters most. Think about difficult journeys, or anything worth achieving in your own life, and it will undoubtedly be met with struggles, challenges, and several points of doubt along the way. For many, the most challenging journey in life is the one for financial freedom. The journey is long and requires some “financial grit” to accomplish. So, as 2019 ends, and we enter 2020, let me offer some ways to inject “grit” into your financial plan!
Find Your Purpose
Before the start of any journey, you must ask why you are undertaking it. The “why” is the catalyst for the journey and provides motivation to see it through. From a financial perspective, the “why” for many may include having enough money for a comfortable retirement, fully funding college for children, passing significant wealth to heirs, the ability to make generous gifts to charity, etc. Without the “why” you will lack the requisite purpose and passion needed to complete your journey.
Be Confident in Your Process
To accomplish great things, you must have a well thought out plan to guide your purpose. A well thought out plan creates belief, with belief comes confidence, and with confidence comes better execution of your plan. In terms of financial goals, you must have specific answers to the following questions to gain the necessary confidence: 1) How much do you need to save each year to retire comfortably at your desired age? (Think money saved in 401k’s/IRAs/Brokerage Accounts, etc.) How much investment risk do I need to take along the way? (Think stock/bond/real estate allocations, etc.) How am I protecting my family until I reach those goals? (Think life insurance/disability insurance) How will my assets pass to the next generation, and who will act on my behalf if I become incompetent or disabled? (Think Wills/Powers of Attorney/Healthcare Directives, etc.)
Set Realistic Expectations
Remember to let your plan focus your efforts, but do not obsess over it. Be willing to adjust your plan along the way if needed. The great boxing champion Mike Tyson once said, “Everybody has a plan until they get punched in the face!” What will you do when you get punched in the face financially? Will you fold, or will you adjust your plan and continue moving towards your goals?
I know each of you will display the necessary “grit” to do great things in 2020! Merry Christmas and Happy New Year!
Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.
Fox 6 Talking Points:
- Find Your Purpose
- Be Confident in Your Process
- Set Realistic Expectations
Marshall Clay CFP, JD, is a Partner and Senior Advisor at The Welch Group, LLC, which specializes in providing Fee-Only investment management and financial advice to families throughout the United States. Marshall is a graduate of the United States Military Academy in West Point, New York, the Cumberland School of Law in Birmingham, Alabama, and is a CERTIFIED FINANCIAL PLANNER™. In addition, Marshall is a frequent guest on local television stations as an expert on various financial planning matters. More information about The Welch Group and important Disclosures can be found on our website. Investing in securities involves the risk of loss. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable or equal any historical performance level(s). Consult your financial advisor before acting on comments in this article.