Children have a knack for asking a question that gets to the heart of the matter. You tell them what to do, or how to do it, and they look at you wide-eyed and ask, “Why?”
Your response? “Because I said so!!!” Yes, your cute little “why machine” may be exasperating, but you really did not answer the question. Consider the wisdom behind the Why?
Leadership expert Simon Sinek wrote a powerful book, Start With Why: How Great Leaders Inspire Everyone to Take Action (Portfolio/Penguin, 2009). Regardless of your life’s role—parent, coach, friend, leader, mentor, executive, entrepreneur, supervisor, consultant, sales professional, military, politician—invariably your success boils down to inspiring or compelling others to take action. Ask yourself, “Why would they do that?”...because they are asking, “Why would I do that?”
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Sinek points out that most people start with what a product, service, or activity is, and how it works. Evaluating the how and what is an intellectual exercise. Sinek says do not start with how and what—start with why! Accepting “why” is an emotional response. My emotional brain must make a connection; the decision to take action must “feel right.” My intellectual brain then begins to evaluate what it is and how I do it, and then I initiate action. I will accept your advice if I believe that you believe what I believe. How often have you accepted advice believing that the advice giver “gets me.” “He (she) understands me.”
When it comes to “why” in personal finance, often it boils down to security. “Security” is another word for “independence.” Once we mature and leave the nest, we want to know that we can provide for ourselves and those we love and care for, those who depend on us. As we age and confront the challenges of aging, healthcare, and special needs, we want to know that our money will last until our passing. We do not want to be a problem for a spouse, our children or other loved ones, or be forced to live in an unsatisfactory situation.
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For some, money is how they keep score, a symbol of success beyond a security blanket. It may be a source of power or an instrument of control. It may have destructive implications as in greed and the fueling of dissipation.
Boomers grew up seeking “more”...more money, more things, and they were willing to work 60 to 80 hours a week in some cases to get it. Generation X and Generation Y, the Millenials, are more into work/life balance. They want to know the why behind something. Why will this work make the world better? Why does this have meaning? How will I make a contribution? The authoritarian, “because I said so,” will not work with the generations coming into the workforce and positions of influence in society as the baby boomers retire.
When you talk to a financial advisor, do you know the “why” behind what you are seeking? Perhaps the role of an advisor is to help you articulate the why. Susan Bradley, an expert on financial and life transitions and founder of the Sudden Money Institute, has said, “When money changes, life changes; when life changes, money changes.” Clearly, it is better that your life run your money rather than having money run your life. That’s where holistic financial life planning comes in.
With any money question or potential life changing decision, start with why first. Then go to how and finally, what. If the advisor starts with what and how instead of why, you are not talking to a financial and life transitions advisor, you probably are talking to a product pusher. There is a difference in outcomes.
The ultimate why in any financial strategy is that you have a better life, meeting personal, family, business, leadership, and spiritual goals. The ultimate how is purpose-driven life experience and the accumulation of wisdom and clarity. The ultimate what is a declaration by God, “Well done, my good and faithful servant.”
May you and yours have a fruitful and blessed 2014!
Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA). Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪ 3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092 ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com