What is Your Financial Endgame?

I have recently been listening to a great podcast out there called the Radical Personal Finance podcast. The host, Joshua Sheats, was doing a comprehensive review of Tony Robbins’s Money: Master the Game. He went over various pros and cons, ultimately concluding that it was a very good book but had a few technical flaws and contradictions throughout.

One of the many inspiring parts of the book, which he paraphrased for the listener’s on audio, was a section where Tony was at a seminar and asked if someone in the crowd would say how much wealth they wanted to have. A young man in his 20s stood up and proudly proclaimed, “one billion dollars!” Tony asked the young man, “Why a billion? What does that allow you to do?” The guy then explained that he figured that would be enough to travel several times a year on a personal private yet to various destinations around the world, etc. etc.

Tony then drilled down a little deeper. He asked if the guy knew how much owning a high class, Gulfstream jet cost? The man didn’t know, so they did a little research and found the number – it was in the several tens of millions of dollars. This is certainly a ton of money, but still a far cry from being close to one billion. They then looked up the cost of owning a used private yet – in the low eight digits or high seven digits. What about just renting a jet whenever there’s a desire for travel? This would cost on the order of tens of thousands of dollars. Multiply this by a dozen or so trips per year, and we’re talking about hundreds of thousands, maybe a million or more. The young man was intrigued, and thought for a bit. It really wouldn’t cost as much to live the high level of lifestyle that he sought.

I like this example because it strikes at the heart of why you or I even care about personal finance. It’s all about the present and future purchasing power that we’re able to exercise. It’s the endgame of all the tips, techniques, strategy, and theory. We all want to have more financial means because it may mean freedom to us, or security, or something else.

I started this blog with the goal of chronicling my wife and I’s journey to financial independence while inspiring others in their journey as well. I realized that I do not have as crystal clear of a vision for what I actually want my financial life to look like. Sure, there are several concrete goals that underlie the foundation of our plan, but I could certainly go deeper with the planning.

What I mean by this is figuring out how much your dream lifestyle actually costs? This is an exercise I did some time ago but never really re-visited it to understand why I was thinking the way I did. Take out a sheet of paper and write “Dream Budget” at the top. Then list out every single category of things you could ever imagine buying, and how much you want to spend on that category per month. The numbers can be outrageous, that’s ok. They can be small too, and that’s ok. Then add up everything and see what you’ve got.

The thing is, you may not actually need much more than the median household income to live your dream lifestyle. In fact, you may need much less. It all depends on you and what your priorities are, but do the exercise and see what the results are. If you’re married, have both you and your spouse do this exercise independently and then come together and discuss what you both wrote down. It’ll start to clarify the vision of what the financial endgame looks like for your family.

Hearing the example from above really inspires me to think more deeply about my goals – not just what I want but why I want the things I want. What does Mrs. Mase want and what’s important to her? What are both of our internal motivations? This is going to take some more concentrated thought…I’ll probably be thinking about this for the next few days now.