Planning for the Five Great Goals of Life

I want to talk about the five things that virtually everyone I speak with is trying to achieve with his/ her money.

Some people have only one of these goals. Some have two or three. And, not infrequently, I meet people who, with a little prompting, turn out to have a bit of all five.

And since these five issues are the main emotional and financial concerns in my own and my family's life, I can effortlessly (and quite genuinely) spark a tremendous amount of empathy on this topic and so can you.

The Five Great Goals of Life are

1. The endowment of a long, comfortable, and totally worry-free retirement, with no compromise in lifestyle, and no real concern about ever running out of money.
2. The need/ desire to intervene meaningfully in the financial lives of one's children, during one's lifetime, and/ or in the form of legacies.
3. The ability to fund, in whole or large part, the education of one's grandchildren.
4. The capability to provide quality care to parents in their later years.
5. The ability to make a meaningful legacy to a much-loved school, temple, hospital, or other institution.

My task is not only to pick superior investments but to guide people- gently, non-argumentatively how much capital they really need to accumulate, and how much time they have.

Few questions I ask on the above goals (assuming the age of earning member(s) is 51 and 7% inflation) :

On worry-free retirement

1. You're 51 now. Take a moment, what are you going to be living on when you're 82 years old?
2. With 7% inflation, the cost of living doubles every 10 years, do you have an investment strategy for tripling your income in retirement?
3. The capital people will need on the first day of retirement isn't the issue. It's how people are going to cope with upwards of a tripling of living costs in a normal retirement.

On children and grandchildren

1. Please tell me: to what extent do you want to intervene in the financial lives of your children, either during your lifetime or as legacies to them?
2. Do you have grandchildren? Please tell me about them. Are you going to want to be- or need to be- financially involved in their education?

On parents

• Are your parents living? Do you expect to become financially responsible for them at some point? I meet families who have a kid going to a college and a parent in a nursing home AT THE SAME TIME.

On legacy

• Is there a particular institution- a temple, a school, a charity- that means a great deal to you, and to which you would like to leave a meaningful legacy?

This exercise can really only have 3 possible outcomes

1. The families look at what it will cost to fund their goals and find that there's no way on earth they can do it. They just need to distinguish between "good to be able to do" and "got to be able to do".
2. The families find that their goals and their capabilities are just right: not too big, not too small...
3. The families find that they can comfortably do everything they could ever want...

My dear readers, plan and review your goals today!!!

The author is the Founder and Catalyst at Aaditya Chhajed Financial Services and can also be reached at aadityachhajed@acfas.in