The One Page Financial Plan Synopsis Part 3: Not All Goals Are Attainable

In late March Balentine’s Director of Communications had the privilege of speaking with Carl Richards about his latest book The One Page Financial Plan. Carl Richards is an author and artist, perhaps best known for his napkin sketches. Balentine has long been a fan of Carl Richards’ message on overcoming psychological factors which oftentimes cause a disparity between returns earned by actual investors versus market benchmarks.

The One Page Financial Plan, then, is a logical next step for Richards, as it effectively counsels readers on how to bridge that so-called “behavior gap.” Over the course of five Market Notebook entries, we explain what our top five takeaways were from The One Page Financial Plan and our subsequent conversation with Richards.

1. Values should dictate how you spend your money.

2. Awareness is key.

3. Not all goals are attainable.

The previous section discussed the need for awareness by budgeting. Through this process, sometimes it may become apparent that some goals are not attainable. In The One Page Financial Plan, Richards tells one painful case where a client realized that her globetrotting travel goals were simply unattainable. It was a hard part of the book to read but an important one, for it is indicative of real life. After all disappointment comes when there is a gap between expectations and the reality of the situation. This is only going to become truer as Americans deal with the looming retirement crisis, chronicled by Charles D. Ellis in his newest book Falling Short. When this unfortunate realization comes to pass, Richards told me, it is important to take the time to grieve the loss then focus on the goals and the simple pleasures you can attain.

At Balentine, one of the first things we do with new clients is guide them towards what is realistically possible. Our 2015 Capital Markets Forecast details how there are several ways of attaining an absolute return goal, each with its own risks and rewards. The starting point, time horizon and risk appetite are three important factors to consider when determining which route is most appropriate. Cash management is another tool we use to help determine attainable goals. We help clients set realistic objectives within these parameters by walking through this process at the beginning of each relationship. Even when some goals may not be attainable, it is always important to focus on what you can control and the goals you realistically should be able to achieve.

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