Cart Before The Horse

"Not only must we be good, but we must also be good for something."

- Henry David Thoreau

"The great and glorious masterpiece of man is how to live with a purpose."

- Michel de Montaigne

Most of us do not achieve our goals, financial or otherwise. The primary reason we fall short is not that we have unrealistic goals or a lack of ability to achieve them. It is because we have not completed an exercise of far greater importance than goal setting. Prior to establishing goals, we must understand the stuff in life that we want to be about. Stephen Covey calls them values, Ben Franklin called them virtues, but we’ll call them Personal Principles. What are the underlying principles that guide you, and how do you want to make a mark on this world?

Establishing goals that are not supported by our Personal Principles can only achieve one of two dissatisfactory results. Either we feel the inadequacy of falling short of our aim, or we change our value system to conform to the goal. For example, if I’m reading a financial magazine that tells me that I need to have $3 million dollars saved to retire comfortably by the age of 55 and I take the steps necessary to meet that goal, I may work two jobs that I hate and be perpetually absent from family functions and my kids’ sports events. If “being present physically, intellectually, and emotionally for my family” is one of my Personal Principles, you can imagine how difficult it would be to achieve the early retirement goal without compromising the underlying value. Goals that are prescribed to us by a parent, teacher, book, or financial advisor that are not supported by our Personal Principles have little chance of success. Conversely, when we align our goals in life with our Personal Principles, we have a very high success rate.

Ah...success. Is that ultimately what we desire? I don’t think so. We long for fulfillment and contentment. Remember our definition of the word wealth? In the financial services industry, on television, in books—even text books—wealth means one thing...dollar signs! If this is true, many among us would never have the opportunity to be wealthy and, therefore, would not enjoy the satisfaction of being financially “successful.”

Stanley and Danko did an excellent job in their classic, The Millionaire Next Door, helping us better understand what financial success looks like. Their conclusion is that it doesn’t really look any different than financial mediocrity. Most millionaires don’t actually fly around in corporate jets and drive Maseratis. They drive pickup trucks and live in nondescript houses and they don’t see the benefit in bidets. They’re successful in their dealings with money because they’ve put money in its rightful place as a means to an end, not the inverse. Success, then, is a natural byproduct of a contented life lived fulfilling your unique purpose.