Last week, we talked about how jumping straight to financial solutions without establishing purpose is like navigating without a destination. That newsletter edition received quite a bit of engagement – it seems this message struck a chord.
Let me share a story that illustrates why this matters so much in our profession. Consider Sarah, an estate planning attorney who, like many of us, started her firm with a clear vision: building a practice that would provide financial security while allowing her to maintain control of her schedule.
Five years in, she was doing everything "right."
Maxing out her 401(k)? Check.
Growing revenue by 20% annually? Check.
Contributing to her children's 529 plans? Check. Yet something felt off.
"I have all these financial goals," she told me during one of our meetings, "but I'm so caught up in hitting these numbers that I can't remember why I set them in the first place. I'm working harder than ever, but am I actually building the life I want?"
Sound familiar? I see this pattern frequently – accomplished attorneys mistaking financial goals for financial purpose. It's like building a house without a blueprint. Sure, you're stacking bricks, but are they forming the structure you actually want?
I'll admit, I used to be skeptical about the "softer" side of financial planning. Mission statements? Vision exercises? They seemed fluffy compared to the hard numbers of tax strategies and investment returns. That was until I watched my own practice transform when I started leading with purpose instead of products.
Here's the exercise I now use with clients to uncover their true financial purpose. Try it yourself:
Start with the basic question: "Why is money important to you?"
You might answer, "I want to build a better future" or "I need to make sure I'm on track." These are good starting points, but they're not destinations. This is where most financial advisors stop, prescribing the standard "max out your 401(k) and buy index funds" solution.
But let's go deeper. When I ask, "What does a better future look like for you?" the real insights emerge.
One of my client's journeys went like this: Initial response: "We want to build a better future." After probing: "We want to create lasting memories with our family." Deeper still: "We want the freedom to take extended family trips without worrying about the office, and we never want our children to feel burdened by our care as we age."
THAT'S a statement of financial purpose!
See how different this is from a simple financial goal? With this clarity, specific goals naturally align with purpose:
- Allocating $15,000 to a 401(k) annually
- Building a $10,000 annual brokerage account for additional liquidity
- Creating an estate plan within 90 days
- Researching beach properties for family gatherings
Notice something interesting?
While tax planning matters, this purpose demands liquidity for the beach house. Following standard advice to maximize retirement accounts might have actually worked against their true purpose.This is why I believe so strongly in starting with purpose.
Your purpose might be completely different – perhaps it's about creating a legacy through charitable giving, or building a firm that continues serving the community after you step back. The key is identifying what truly matters to you before jumping into the mechanics of how to get there.Here’s another example:
So let’s dive in. Here's a simple exercise to try this week:
- Write down your current financial goals
- For each goal, ask yourself "Why is this important?"
- Keep asking "Why?" until you hit an answer that resonates at an emotional level
- Use that answer to craft your statement of financial purpose
- Review your current financial strategies – do they truly serve your purpose?
Found this approach helpful? There's more where this came from. Subscribe below to ensure you never miss an episode of Money Meets Law. Each week, we'll continue exploring how to align your financial decisions with what truly matters in your life.
