Some say “money can’t buy happiness”, but are they right? A recent study in the scientific journal Emotion did link an increase in assets to increased happiness, but science doesn’t have a definitive answer for us yet.

We can help secure your legacy with a charitable trust.

It might have more to do with how money is used to achieve goals, rather than the money or assets themselves. Amartya Sen, an economic philosopher who won the Nobel prize for economics in 1998, has published work that takes a huge amount of data into consideration across many countries. His work suggests that cultural values make an impact on happiness, and the amount of happiness and value that’s achieved through goals is not uniform. In some countries, home ownership is more closely tied to happiness than college education, in others the converse is true.

Identifying what you want

What financial goals are you working toward? Perhaps one of these?

  • Worry-free cash flow management—with reliable income streams and expenditures.
  • College education for your children—without the burden of debt.
  • Home ownership—with a white picket fence and space for a garden.
  • A comfortable retirement—without running out of funds.
  • Financial family protection—in the event of misfortune.
  • A lasting legacy— for the generations.
  • Charitable giving—with maximum impact on a tax-efficient basis.

These are all admirable goals, and so must be balanced and prioritized. Your goals may be different. Once you’ve identified what you want, you can start creating a plan with actionable steps to help you achieve your goals.

Understanding how to get what you want

Your identified priorities can help you remain steadfast.  You may adjust your goals and planning as circumstances change.

Some of the basic steps of achieving financial success include:

  • Create and manage a monthly budget, so you know how much of your income goes to basic needs, and how much is available for other categories.
  • Automate your savings for specific goals or 401(k) contributions.
  • Pay off high-interest debt such as credit card debt first, so you can save more.

How much savings will be needed for any particular goal? Arvest Wealth Management has thirty-six financial calculators setup on our website to address those questions.

Here are a few examples of what you could find out:

Retirement.  Funding financial independence for retirement is the most important financial goal most people will face in their lives. The How much do I need to fund my retirement? calculator will let you see how much you need to save based on how much you plan to spend and for how long.  For example, how large a nest egg would you need to be able to draw down $3,000 per month for 20 years if the rate of return on savings is 5%?  You would need $455,939, according to the calculator (numbers are before taxes).

College savings. University tuition costs have increased substantially more than inflation, but you can also earn on your savings during the years you’re saving. The How much do I need to save for college? calculator lets you put in those variables, and see what you need to save each month based on how many years you have to save.  For example, let’s say tuition today is $15,000 per year and it is going up 3% each year.  If your child will be entering college in eight years, at that point the four-year tuition total will be $79,495.  If you save $490 per month and can earn 5% of the savings, you will reach that goal.

Investing. Often, one may know what one has now, and may need to estimate a future value. With the What will my investments be worth in the future? calculator, you can quickly answer that question. For example, you may want to start a business with your own capital, but need to know how long it will take until you have enough based on your current portfolio. Alternatively, you may know what the down-payment is on building your dream house, and are curious to know what rate of return you would need over the next 10 years to make it happen. Let’s say you’re starting with $50,000, and you know you need to double your money to $100,000 to get that business rolling or dream house down-payment. You’ll find that you would need either a rate of return of 7.2% over ten years, or a rate of return of 10% over 7.2 years to double your money.

These tools are fun to play around with, and you can see an overview or detailed reports after filling in the information.

Getting what you want

Financial planning can be overwhelming. That is where the experts come in. Doing it yourself is fine for learning to cook, perhaps, but your financial future should be in the hands of a professional.

Meeting with a client advisor, such as those at Arvest Wealth Management, can help you understand what variables to consider and develop strategies that are appropriate based on your current assets, needs, and risk tolerance.

To make the process easier for yourself and your advisor, you can prepare for that meeting with three important steps –

  1. Identify your goals and define them as a need, a want, or a wish.
  2. Gather documents regarding all your assets (such as investments, savings accounts, etc.) and liabilities, (such as college or mortgage debt). Create a budget of income streams and monthly expenses.
  3. Write down questions you’d like your advisor to answer during the meeting. Don’t be afraid to ask questions that might seem awkward, such as how the advisor gets paid, how they’ll communicate or measure progress with you, or what their investment philosophy is. They succeed when you succeed, and will be pleased for the opportunity to share how they create value.

We all need a little help sometimes. Sometimes it’s from others, sometimes it’s from ourselves. Even if you’re not going to arrange for a meeting, take some time to identify goals and create an action plan. It could help to set success in motion.

Click here to setup that first meeting!


The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The figures used are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.

This content has been provided by Merrill Anderson and is intended to serve as a general guideline.

© 2020 M.A. Co. All rights reserved.