Breathtaking. Mindblowing. Inspirational. It took me a while to find the adjective that goes some way towards describing our incredible and uplifting vacation in the Swiss alps. I decided on awesome – its real definition being “causing awe of the Creator of such magnificence”, as opposed to its colloquial overuse to describe pretty much anything that is marginally good!
What made ‘our’ mountains even more incredible, were the seemingly infinite options that they offered us. Hikes and trails of all types of length and difficulty, circular and straight, seemingly similar and simultaneously, breathtakingly different. We had countless options in so many directions. Multiple trails, converging at different points, separating and then reconverging.
Having time away from the hustle and bustle of day-to-day busy life, gives us more time to reflect, and I naturally found myself reflecting on the many parallels with life planning and specifically, financial planning.
We all have our own starting point and, figuratively speaking, end point of our financial plan – that point in life when we reach our goals and stop stressing about money. And as we were shown so clearly in the mountains, there are countless ways to reach our destination. This is where I insert that those who do not have an end point for retirement and lifetime financial goals, need to identify them. As stunning as those Swiss trails were, under no circumstances did we want to risk getting lost in unknown territory. Without a plan for reaching our final destination, our chances of arriving safely would go down significantly.
Your financial goals will be unique to you, your lifestyle, hopes and dreams. They will reflect the financial components of what you want to achieve in life. While some people have purely financial objectives of earning a certain amount of money, we all know deep down that money is only a conduit to help us achieve our goals, and not an end in and of itself. Your financial purposes might include, for example, helping your kids with education or setting up their homes, having a certain standard of living, or supporting worthy causes or institutions – basically whatever you define as being important to you.
Once you have your goals defined, you must decide how you are going to achieve them, and what your timeline will be. You may need to reconsider your employment, potentially taking a different or additional job, possibly saving more for the future by living more frugally in the present. But whatever goals you choose, you must have an ultimate destination in mind.
Sometimes you might choose to go off the trail, for a scenic detour. There also may be situations not of your choosing that result in your financial plan veering off course, for example losing a job, a health emergency or a market crash. But if you don’t have a plan, how on earth will you know if you have strayed too far, and if you can still manage to get back on the track to arrive at your destination on time. Short, medium or long term goals give us a framework to stop and evaluate our route. Understanding the time dimension is crucial when planning, as it provides the framework for making critical decisions like necessary savings rates, acceptable investment risk, and whether or not we really can afford that new car or vacation.
However, despite our proactive efforts, life doesn’t always go according to our plans. We have to be ready to reassess and possibly change direction if our circumstances demand it. Taking the time to evaluate your route and assess your options is critical. Over the past few years, between covid and the downsizing of the tech sector, there were many people who lost their jobs, and had to reinvent themselves and find a different career to bring in much needed income. Remember that there isn’t only one path that we can take to reach our destination/goal. Different families, even within similar communities, might choose very different routes forward.
As we progress along the financial path of our choosing, it is also critical to take a breath and enjoy the ‘scenery’. Live in our moment and appreciate our gifts. We have to make every effort to make our financial journey as enjoyable as possible. The key to that is by making prudent decisions that suit our lifestyle. Choose the trails that challenge you according to your ability, but don’t derail you completely.
I can’t end without clarifying that despite our incredible break abroad and the inspirational financial insights I discovered, there is no better place than our home in Israel with all of its unique landscapes and history. Let’s take advantage of all it offers and make our journeys count.