The First Step In Your Journey To Retire Happy

first step to success

If you read my last blog post, I laid out 5 steps to follow if you want to have a happy and low stress retirement, regardless of what is happening in the world around you.

After all, worrying about markets, politics, the economy, etc. have never been bucket list items for my clients.

I promised to provide more detail on each step in upcoming posts and today we will drill down on the important starting point for your successful journey; Know Your Why.

My Advisor Isn’t Aggressive Enough

Just yesterday, I was speaking with a new referral who was concerned that her current adviser wasn’t aggressive enough for her and wanted me to look at her portfolio to determine if she was getting value from her investment manager.

My initial reply was to ask what she had told the manager to do for her. She wasn’t sure what I meant and she replied that a portion of her assets had earned nothing in the past year and the rest she knew had been making more.

Upon further discussion, she indicated that she wanted to fill an income gap and that she was worried about running out of money and whether she would be able to leave assets to her heirs.

I tried to explain that her current portfolio wasn’t set up to generate reliable retirement  income and the assets she had chosen to leave to heirs had significant tax ramifications for her beneficiaries. She then asked me what many ask upfront, “what would you do differently”?

The Reason Why For Why

I said I couldn’t answer that question without knowing more. I explained that we had tools and a process to help clarify her why and more clearly define what she wanted to happen in the future and what kinds of tools would be best suited for her situation.

Over the years, I have seen that most people have been saving and investing because someone said they should and were following what friends, family or advisers had told them to do. Many of these folks were uncomfortable with their portfolio and overall financial situation but didn’t know what to do. Much like my conversation yesterday, there was no “why” guiding their decisions and strategies.

reason for why

Wall Street trains their representatives to sell investments using the 2 main motivators: fear and greed. I was taught this in my first broker job back in the 1980’s. While that can lead to greater sales and earnings for brokers and other financial salespeople, it can often lead to frustration, stress, and loss of confidence clouding the decision-making process for investors and savers.

This is one of the reasons I left the brokerage industry after a few years as I was frustrated that the objective was not making money for clients. That is when I came to realize that fear and greed can skew thinking and decision making in nonproductive ways.

It’s Time to Start Asking Questions and Making Decisions

See, knowing your why gives you context for decision making. Once you are clear on your purpose and motivation, you have the parameters you need to help make decisions that move you toward where you want to be.

Ask yourself, once you are clear on your why, “does this option move me closer to having what is important to me?” This will help you to shut out the noise that never stops and stay focused on where you want to go. This will allow you to relax and make better decisions.

Here are a few questions to ask yourself while clarifying your thinking:

  1. Why am I saving and investing? Is it just to make money? (usually not)
  2. Why is this important to me?
  3. What is my purpose in pursuing this (very different than goal setting)
  4. Am I committed to the outcome or am I just saying it because I “should”?
  5. How will this decision help me to achieve my purpose?

Let’s look at how this works in a real-life situation.

Like the person I mentioned above, most of us focus on rate of return for our investments. I would ask you, is rate of return the best measurement of successful investing? While that is what most folks measure by (how did I do relative to a market index), that may not get you what you want from your money. Say your why was to have an income that you can’t outlive and that keeps pace with inflation.

If that was your why and you kept everything invested in stocks, how would you decide how much you can withdraw each year to live on? Would you take a percentage of the balance (say 4 or 5%)? What happens if inflation increases, would that be enough? What if we had another market drop like 2008 and the value of your portfolio was cut in half? See, stocks are a “growth” asset, and can be good for seeing your wealth grow over time.

Your Why and Retirement

However, in retirement we need income, so maybe if your why is to have an income stream there should be some income-oriented investments in the mix. This might lead you to consider adding bonds to the mix. In a different era, bonds or cd’s could be a good option, but today the yields are so low, it would be difficult to meet the income requirement without using very high yield bonds. Let me ask you, if you needed to depend on those bonds for income to last your lifetime, would you be confident that non-investment grade guarantors of those bonds would be able to continue to pay the interest during another 2008 style meltdown? Can you see how being clear on your why might help you make better decisions?

One of today’s great challenges is creating dependable retirement income streams. That is why we focus on strategies and tools that can help you accomplish this in all kinds of environments; low interest rates, inflation, market corrections, recessions, etc.

How Do You Get To Your Why?

If you want to clarify your “why”, we have a tool available at no cost on our website. Go to the home page of our website at and toward the bottom of the page is a button that says, “download your free thought organizer now”. Download and complete a copy of this tool, it can be very helpful in clarifying your WHY.

I hope you can enjoy a low stress, Happy Retirement!