Paul Ferraresi

Goals are things you may want to do or have. Purpose is using your money to fulfill your core values. It is our job, here at Founders Group, Inc., to help our clients align those values with their decisions about money. Achieving this balance will greatly enhance your likelihood of experiencing happiness and peace of mind. As Olivia Mellon, Ph. D., author and psychologist says, “If your relationship with money is not in balance, no amount of money will help you. It is our job (as financial planners) to help our clients find balance around money”.

I have asked all of my clients what their goals are, get a response like, “I want to accumulate $3 million by the time I am 60 years old.” Of course, this may be a goal, but it certainly isn’t a purpose. What is the underlying value behind that statement? It could be several things. Perhaps $3 million represents security, or freedom, or power, or peace of mind. When I get a response like that, I probe much deeper to discover what it is the client really wants.

If I were to ask this hypothetical client who wants to accumulate $3 million how he would want to be remembered, it is doubtful that he would say “as a person who accumulated $3 million.” Understanding the core value that is driving the goal will help me to better provide you with better advice.

When was the last time you read an obituary that said, “Frank will be remember most for his large home, his Mercedes and his bank account.” By asking clients how they want to be remembered will facilitate a discussion about their core values. From there you can live those values by aligning your decisions about money with those values.

While we all know that money is a means to an end, it seems that we need reminding from time to time. An article written on the Web site www.MoneyInstructor.com tells us the following story about a financial advisor who was working with an 85-year-old man to finalize his estate plan:

“The man had built what began as a small estate up to the sizeable sum of $8 million. Unfortunately, the man had also recently lost his wife of 40 years. It was during the discussion of how the money was to be dispersed that the man had the sudden realization that the money he has spent his entire life stockpiling would never be used for his or his wife’s enjoyment or benefit and therefore it was essentially worthless. The old model does not work because the old model gets the fundamentals wrong. Understanding the purpose of money is the starting point to offering good money management advice and to making good money management decisions.”

In order to understand a client’s values and help them identify a purpose for their money, I need to ask the appropriate questions. For every goal or desire expressed by our clients, we ask whether it represents a core value for them. Or is it just something they would like to do, or something they feel obligated to do. One example is asking them how they feel about philanthropy. Perhaps they classify that as a core value, but they have made no provisions in their estate plans for charitable giving. Instead, they feel an obligation to leave all of their money to their children. Of course, giving money to charity may be a goal, but shouldn’t we probe further to determine what the underlying value is? If that value is “making a difference” and they understand that, philanthropy would be one way to live in alignment with that value, and they may decide to use some of their assets to help fund causes that are important to them.

Peter Vadia, Ph. D., co-founder of SpiritHealth, wrote, “ When one comes from one’s core values, one’s inner sense of what is important in life and living … is at the heart of a life well lived, at work, at home and at play … and is at the heart of creativity, self management, self-responsibility, healthy behavior (mental, physical, emotional, spiritual, social, financial). Money, in this sense, has a different emotional and psychological energy around it, a softer energy, not unlike the energy reflected in one who says, “I love my work and I can’t believe I get paid for doing this.”

Our firm’s mission is a simple one: “To improve the quality of our client’s lives.” Helping them to find a purpose for their money is a key to fulfilling that mission.

I hope this article has helped in your understanding of “you”. As always let me know your thoughts.