Thursday, February 15, 2007

The BIG picture

A young couple came into the office today for some financial coaching. The husband wants to start a personal service business and his wife does administrative work. She wants security and he has an entrepreneurial bent. She wants to set aside money for their retirement and wants to know how that can be done because they also need money to get his business started.

This led us into the conversation about the big picture versus the details. The BIG picture is retirement. The details are stocks, 401(k), social security, real estate, mutual funds, insurance, etc. Too often I find people focus on the details to the exclusion of the big picture. As an example, if you were to cross the street and focus only on the details, like how high the curb is, are there cracks in the street, an open sewer drain, puddles, whatever, and each step you took was to avoid problems with the details you could get killed. Why? Because you must first see if there are any cars comming from any direction. That's the big picture.

When it comes to money, it seems easier for most people to focus on the details and they are completely disconnected from the big picture. The big picture could be having enough money so that work becomes a choice, instead of a requirement, at age 60, or 55, or 75 or whatever. The details are, "Should I remodel the kitchen or bathroom?" Well, maybe neither one should be remodeled, or both should be done. The question should be, "How will remodeling fit into my big picture of retirement at at 60?"


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