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Hello once again. Financial resources can help or hurt your family wealth, your personal definition of success, and over time, your legacy in your family.

Family Wealth = Resources (Human Capital + Relational Capital)

Family Wealth = Success = Family Legacy

This month I’m sharing an article that I co-wrote with a close friend for decades who also works in family wealth wealth, Ari Fixler. We were given the opportunity by Olympia Trust to write something novel and interesting for their website. We chose the area where our professional interests overlap; your financial goals.

Goals-based planning is absolutely central to the work I do and the way I see the world. As noted in the article, wealth accumulation of all scales must answer the question “so what is money good for?” and wealth of all scales is well-served by not ending that answer at the all-too obvious and trite “to retire”.

I hope you enjoy 🙂

Investment strategies are like those big cookbooks with countless recipes. You tend to pick the meals that are the most gourmet, but really, you should pick the meal best suited to your taste and ability.

When we sat down to co-write this article on goals-based planning, we came at the topic from our respective seats in the wealth management industry. Ari is a wealth management Investment Advisor and Financial Planner and has been in the trenches making retirement possible for Canadians for 17 years. Adam is a lawyer with a tax and estate planning focus that most recently ran a Single-Family Office for a fourth generation Canadian family and their wealth management firm. We have seen a lot of aspects of wealth for families of all sizes and at all stages. There is no doubt that one topic binds us all: planning.

As two born and raised Calgarians, we have seen the growth of this incredible city and the personal wealth that has been gained as a result. The amount of wealth the Baby Boomers have created is truly astounding. Yet, a large percentage of those successful Boomers did not consider themselves happy, successful, fulfilled or even wealthy!

Their relationship with their financial success was not well-formed, not clearly articulated, and without a clear reason for the wealth creation, some of those “success stories” became legitimately unsuccessful.

When we get together and talk about success, we try to clarify our “wealth purpose”. Good fortune comes to those that know why they seek wealth. This good fortune is available to everyone intentional enough to discover it.

The key to a successful investment strategy

The key to a successful investment strategy happens prior to the strategy creation. The goals are the foundation of your investment house. Without a solid base, your investment strategy is bound to crumble under the weight of uncertainty.

Sure, there are many other critical topics in investment strategy (risk tolerance, liquidity tolerance, geographic and industry specifics come to mind) but families that have laser-focused, strong answers to the key question, described below, meet their investment goals far more often than families that don’t.

The key to your investment strategy is your goals. What is your investment strategy driving towards? To frame the question as simply as we can: what is the wealth good for?

We all feel the urge to answer this question simply, as it relates to our basic human needs, and leave our inquiry at that. This might sound like the answer currently in your head: “I want money so that I can work less, or not at all, and still have the lifestyle I aspire to have.” This is a strong enough answer for your investment advisors to develop a strong financial plan and get to work, like the work Ari does with his clients.

This is a good answer. However, the best plans go deeper. The best plans require that you explore your emotional relationship with wealth. The best plans contain very careful detail about your lifestyle goals to avoid lifestyle-creep (the idea that your lifestyle spending seems to always increase in correlation with your income).

Wealth creators that have solved your basic human needs have even more responsibility to work out clear answers for your investment goals. We slightly alter the question for these individuals to “what is all this money actually good for?” and whenever wealthy people align their investment strategies to their evolving answer, they find greater contentment and satisfaction. They find their wealth purpose.

Back when we first started hanging out together as friends in the early 90’s, if we weren’t listening to music, we were reading comic books. It’s not surprising that we reference Spider-Man for some life philosophy. Uncle Ben’s key advice to Peter Parker applies to your wealth. Wealth is an incredible resource, a type of superpower, and it can be harnessed to fulfill your life, improve your well-being, and impact the lives of those you care about. Wealth is power and as Uncle Ben pointed out: With great power comes great responsibility.

By building effective goals, you clarify your wealth purpose (the point of creating the wealth in the first place). Without goals, the chances increase that comfort and luxury overstep their boundaries. Without goals, unnecessary investment risks are way too easy to take.

If planning is where all wealthy individuals must excel, it is probably clear that the key step in the planning is to answer and understand what your goals are. What are you trying to achieve? Sometimes the most important questions to ask are the most obvious ones.

We hope this obvious question is not just left as a mild curiosity. Attack it! Get the notepad out and start exploring your answers. As Uncle Ben would advise, take responsibility! The pursuit of clarity of your wealth’s purpose will be valuable, we assure you. Success as you alone can define it.