Recently, I was working with a new client, Derek, and collaborating about his financial goals. He told me that he really didn’t have any goals. Instead he likes the idea of a financial system.
Financial System, Not Financial Goals
He acknowledged that the word, “financial goals” is vague and not very descriptive. Derek is a former collegiate soccer standout and the word “goals” made him think of going to college soccer practice. He missed those days – the camaraderie, the feeling of winning, and being in tip-top shape.
Furthermore, he played on an elite soccer team that won the national championship. He said that of all the teams they beat, everyone of them had the same goal – to win the national championship. If the successful and unsuccessful teams share the same goals, the goal cannot be what differentiates the winners from the losers.
Then we worked on describing and outlining his financial process as a financial system. Having a system for succeeding at soccer – stretching, video analysis, and weightlifting, helped him and his team win the national championship.
A system is a way to continue playing the game – soccer, finances, or anything else – for the longer term with continuous improvement. It’s not about a single accomplishment.
For Derek, the ideas of a system are real and tangible. He can grasp what he can do every day, week, and month to get the desired financial results. A system also allows for positive feedback through acknowledging accomplishments along the way. Through a series of financial approaches, we created an overall financial system so that he can maintain his long term focus.
Derek works as a software engineer at a large tech company. The idea of having a system for RSUs as they vest every quarter makes a lot of sense to him.
First, he can manage the amount of shares that he owns in his employer stock and he reduces his taxes in a straightforward way.
Furthermore, Derek has stock options and we put together another methodology to manage how to exercise the options at the right time. Next, we determined when to sell them at the appropriate price and moment, followed by taking into consideration his taxes, including the Alternative Minimum Tax (AMT).
Finally, another financial system that we put together is managing his strategy for early retirement at the age of 45. He’s enjoying a very successful career and would like the option to escape from the 7-days-a-week pressure associated with his high-ranking job. Some of the ideas that stem from an early retirement are spending more time with his children, going to visit his parents more often, and seeing more of the world.
The thought of financial goals can be a vague idea. A financial system is a more tangible thought. If you’d like to chat about finances – goals or systems, and a continuous way to increase the amount of money in your coffers, please set up a free consultation.