Money Mindset

Chapter 4 The “Why” of Financial Management

In this chapter we explore what it will take for you to become financially independent. But first, I need to stress how important it is to have a respect for the emotional, as well as the economic, aspects of wealth. Both play a critical role in your financial independence.

In order to address the emotional aspects of your personal financial management, you must start with the “why” of your ultimate goal. What does that mean? Simply, you need to understand your life’s dreams and why they are important to you. What are you working toward? Why are you investing? What is your end game? And do you have a process to achieve your life’s dreams? Fortunately, if you start with the “why” the rest will follow. The rest primarily includes the “what” and the “how” of getting there.

What’s Your “Why”?

The first step in discovering your “why” is to recognize what makes you tick. For example, my wife and three kids are what make me tick. The love and support I receive from them, and the fulfilling feeling that I receive by reciprocating, is my “everything.” My “why” is to provide a consistently healthy and safe ecosystem for my family.

If you are married or in a long-term relationship, you might want to have a conversation with your partner about the “why.” Where do the two of you want to be in 10 years, or 20 years? Do you want to have a beautiful retirement to spend more time with the grandkids, do you want to sail around the world, do you ...