Updated: May 8, 2020
As anyone typical of my generation will tell you, I've worked in a few industries. When I was doing my college tour at USC in Los Angeles back in 2003, the tour guide told all of us that we would have on average seven career changes. Yes, career changes, not just job changes. I started during and right after college in the event planning industry. I've worked in an art gallery, for a small financial planning shop, then went to graduate school thinking I might work in the non-profit space. After grad school I went back to financial planning, working on the investment side. I've also had a calligraphy side gig along the way. Let's see if I make the count:
1. Corporate, Charitable, Social Event Planning
3. Financial Planning Assistant
4. Art Gallery Sales Associate
5. Insurance Researcher (Internship during grad school)
6. The Arts Community Alliance Researcher (Internship during grad school)
7. Financial Analyst - Investments
8. Founder - Financial Planning Firm & Creative Firm
Pretty close. Some (like the internship) aren't really careers per se, and some fit in the same category, but I think you get the idea. You know what all of those businesses and learning experiences had in common? A mission statement.
As you go through life building your career(s) and building your nest egg, I encourage you to think about your financial future as something requiring a mission statement. If you google mission statement, you get something along the lines of defining aims and values of a business or an individual. I think of a mission statement as a big Why? I don't think a mission looks like a New Years resolution, or even a 5 or 10-year plan. It's much bigger than that.
Throughout all of my work experience and continued education experience, one theme has played throughout. I know I've wanted a certain amount of money saved by the time I retired. Whether that is $500,000, $1,000,000 or $10,000,000 for you, I think it's a good anchor to strive for. I like to really nerd out and see how that's possible - how much to save, how much investment return I need, when my "number" might be a reality. My "number," however, is not my mission. My number is a goal. To define your mission, think more deeply.
Here are three steps to creating your financial mission:
1. Look at your past.
What was it like growing up with money in your family? Was there enough? Was there any education around money? Did you feel freedom around money and having dinner on the table, or was it a constant struggle? Did your parents or caretakers seem relaxed or stressed about their next paycheck? Was your family able to save, or was it really tight all the time?
These questions can give you an idea of what you want moving forward. If your family never saved, figure out a way to automate savings for yourself. If your family never taught you about money, break the cycle and teach your children. Money cycles don't have to perpetuate anymore. The internet is packed with money saving tips and strategies, don't make excuses when it comes to educating yourself.
2. Look at your present.
Are you repeating the same mistakes of your past? Do you live paycheck to paycheck? Do you regularly check your balances, or do you block it all? Do you have a savings plan? Are your savings invested properly? Do you spend for emotional reasons, or even save too much?
It's a brand new year and a brand new decade. You can change your financial behavior today.
3. Look at what money provides, and what it doesn't, before you look at your future.
I'm not going to be one of those "money is evil" people. It is necessary and provides us with food and shelter, and nice things that make life a little easier. It doesn't provide emotional support though, and shouldn't be relied upon to offer "guaranteed" investment opportunities, or unrealistic return streams. I love that everyone is into "passive" income streams these days. Since when did earning money for doing nothing become a thing??
Call me old-fashioned, but I like the idea of getting a job and building a career that provides regular income. I like the idea of automating retirement savings, so that what lands in your bank account is a "net" amount available to spend. I like the idea of buying or renting a home that doesn't stretch you too thin, so that you can afford groceries and property taxes and the occasional vacation and nice dinner out. I like building a nest egg over 40-50 years, rather than assuming an investment will provide me a 20+% return.
So, have you answered the questions, do you have an idea of what money is for you? Now it's time to build your mission statement. This is a long term goal that will satisfy a deep need around money, and provide for whomever you decide it should provide for. Here are some sample mission statements:
"My mission is to provide financial stability for my family. I live to build a career, save for my children and myself, and retire with a life well-lived, and money to travel and spoil my grandchildren."
"My mission is to travel now, and live now, while still saving what I can. I recognize that my version of retirement will look different than others, and I may work until I die, but I won't sacrifice life experience for a large nest egg when I'm 70."
"My mission is to feel safe and OK when it comes to money. I want to teach others what I wasn't taught about money, and I want to automate my savings and investments so that I don't have to worry daily."
Each of those missions can break down further into specific goals. If you are right out of college and feel like you have literally no money - try to save $50 or $100/month. That's one fancy dinner or night at a bar. See if you can automate it, so that you don't have to overthink or justify saving over spending. Then reassess every few years, and as your income grows, increase your savings rate to 10-20% of your income.
If you are 30 and finally feel like you are getting some traction on the career side, make some real, concrete goals around that 10-20% savings goal, and do some research on investment strategies. Please, don't miss out on this crucial decade of financial growth.
If you are 40 and haven't saved a dime, it's time to commit some serious time, effort, and money to saving. Meet with a financial advisor or at least find a free tool that calculates what you need to do. It likely means some sacrifice on the "fun" side of things, but building a nest egg does wonders for building confidence.
If you are approaching retirement, I hope your are in the right place financially, and can decide how to adjust your investment strategy to ensure your money lasts and provides for the finer things. I believe a financial advisor is crucial here.
I'd love to hear what your plans are, or what you feel you mission and goals are. Subscribe or fill out my contact form, and you'll hear from me soon!