How Before Why is a Formula for Failure

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by Rob Schulz, CFP®

June 6, 2011

I always ask my clients “why” when we discuss their financial goals and objectives. Why do you want to reduce debt? Why do you want to save for retirement? Reducing debt and saving are not goals, they are strategies.  Too often people want to skip the “why” and rely only on the “how”.

This is one reason so many Americans fail in the personal financial areas of their lives. We start out life asking “why” to everything but then grow up and somewhere along the way forget the question completely. Maybe we don’t like the answers, or maybe the answers become too hard to find in this busy and hectic world so we stop looking.

In many cases we think we found the answer, but it’s to a different question: ”how”.  I can assure you, advising people on how to manage their finances is pretty easy and completely useless by itself.

Just about anybody can dole out general advice on how to become debt free, save X amount of dollars by age 55, or fund college expenses for children.  It’s not difficult at all to tell other people what to do and, in fact, it’s very personally gratifying! It is this elevated self importance that drives much of the advice we receive, whether it comes from a radio talk show host or your brother-in-law.

Advice on “how” can sound great even when it’s not relevant to your specific situation.  Becoming debt free may be a sound strategy for one couple, but an aggressive payoff of debt could significantly hamper another family’s ability to achieve their long term goals and objectives.

I believe one of the most important aspects of my job is to help my clients dig deep and discover why they carry out their daily routines of work, saving, and sacrifice. Having a good answer provides us with the motivation and sense of purpose we need to succeed..

We all have our own trail to walk.  Avoid getting lost in the woods by asking “why” before barreling off in the wrong direction.

Rob Schulz, CFP®

Rob Schulz, CFP® is a Principal with First Texas Financial Services, Corp., and a Registered Representative through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. He is also an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and FTFS are not affiliated. These are the views of Rob Schulz and not those of Cambridge, FTFS, or any of their affiliates.

 By Rob Schulz