The Great Tradeoff

The Great Tradeoff

In life and financial planning, maybe because they are so closely related, there are tradeoffs for almost everything we do or want.  There are thousands of micro tradeoffs throughout every day, week, or year.  For instance, do you do the nicer vacation and not as nice excursions, or lesser vacations and spend more on activities?  Or do you get better seats for the Taylor Swift concert and no dinner before, or worse seats and a nice meal with your company prior?

Our lives are essentially one big tradeoff or compromise.  There are very few people out there whose finances don’t play a major role in their daily, weekly, and life tradeoffs.  This blog is less for those fortunate few, and more for the rest of us.  Furthermore, for this blog, I don’t want to focus on the small tradeoffs that happen more frequently, although they can clearly compound to make a large difference.  Rather, I want the focus today to be on the macro items that take real soul searching and thought.  Those items that are foundational to who you are and what you prioritize in life. 

Let’s discuss this, shall we?

At the end of the day I, and my colleagues here at Diversified, LLC, are in the business of dream-making.  We help enable and uncover to our clients what the realm of possibilities is when it comes to their lives and their life goals.  We do so by first understanding what are our client’s goals.  Next, we start to illicit out of them their priorities in achieving these goals.  It is important to start to consider what goals are a must and more importantly at what cost.  Finally, we use our fancy modeling software to help us all understand what is possible and the tradeoffs in making it happen.

For Example: Let’s say it is critically important to you to pay for your children’s college education at ALL COSTS.  For starters, our job isn’t to tell you flat-out yes or no.  Rather it is, first, to help you understand what it would take to fully fund this expense.  Next, our job is to show you what the tradeoffs are and the unintended consequences of making this a top priority. 

Finally, and most importantly, it sets us up for the very human part of financial planning and partnership.  The discussion and heart-to-heart phase of what we do.  This is where deep and meaningful conversations happen.  This is also where we get down to the fabric of who we are as people. 

Understanding Goals

Our job isn’t to kill a lifelong goal or dream of yours.  Rather it is to help you understand what it will take, and the ramifications of these decisions.  Then it is our duty to help clear the way and work side-by-side with you to make strides in achieving these goals.

Back to my example.  Let’s say we determine that you can pay for your children’s education, however, it comes at the cost of retiring 5 years later.  This prompts a critical conversation for us and our clients to have.  We go back and forth on the options.  Do you pay for half of college and retire only 2 years later?  Do you give a set amount to each kid knowing you did your best and still retire on time to enjoy the fruits of your labor?

Making Life Changing Decisions

These are those big-time, fabric of our being, types of conversations or tradeoffs that can define our relationship together.  Possibly, my favorite part of my job is living in the trenches of these massive life-defining decisions.  This is why we have trained with clinical psychologists to help us really understand and uncover what is most important to each one of our clients, and why.  It is through these conversations, modeling, and open-table understanding of the tradeoffs that we collectively can make a truly informed decision.  This is where “the great tradeoff” happens. 

What I’ve found is not only is this a valuable and rewarding part of what we do, but this is why we do what we do.  There is nothing more rewarding than helping someone clearly define and understand their goals.  Then helping them plan and execute how to achieve them.  It is this unwavering clarity and direction that provides so many of our clients and friends with a peace of mind that many search for, but very few find.

I am proud of what we do on a daily basis and humbled that all of you continue to put your trust in us in helping you achieve it.  Next time you are faced with a difficult decision try starting with this time-proven recipe, oh and give us a call as we are here to help.

Stay wealthy, healthy, and happy.