Learn more about Jeremy at NerdWallet’s Ask An Advisor.
Are you successful? Do you wake up in the morning and think, “Wow, I’ve made it. I have attained the level of success I envisioned for myself”?
It may be hard to feel that way if you haven’t really thought about what being successful means to you. Merriam-Webster dictionary says success is “the fact of getting or achieving wealth, respect, or fame.” But is that how you should define it?
As a financial advisor, I work with people on their financial goals all the time. But I also help them think about their life goals and what will really make them happy and fulfilled. To find success, the real question you should ask yourself is, “How do I measure success? What would make me feel successful?”
Many people equate success exclusively with money. While we do need money and it can make some things easier, this shouldn’t be the focus when you think about your definition of success. Your level of success should be measured by your level of happiness. And this is where behavioral finance comes into play.
Having $1 million does not indicate whether you are happy or successful — you very well could be, or you could still feel unfulfilled. Working with entrepreneurs, I am frequently exposed to this success dilemma: They have found financial success, yet they are still looking for something else. Maybe they are gaining traction in the marketplace and seeing revenue increasing or perhaps have had a graceful exit from their business. But this does not ensure their success because it does not necessarily ensure their happiness.
That’s because it’s how you attain your wealth and what you plan to do with it that will truly determine whether or not you feel successful and satisfied. Money alone (even lots of it) is not enough to make most people happy. And that’s why the real focus of financial planning should be on creating a destination goal, not arriving at some terminal “magic number” that will suddenly make you happy.
Your destination goal should encompass and define what makes you happy. Instead of saying, “I want X amount of money in the bank when I retire,” you should be saying, “I want to be able to do this with my family and friends, provide for these people and charities, and have these things or experiences.” Those types of goals will force you to think about happiness and purpose. And I think you will be shocked to find that the amount of money needed for what can truly bring you happiness may be much lower than the savings goals you have set for yourself.
When I was in college, I had a great professor who, on the very first day of class, asked us to define success. You can imagine the answers given by a bunch of college seniors. He digested all of the responses and then said simply, “Success is being able to live your life in the manner you choose.”
For some of you it might be money. But being that I manage money for a living, I can tell you it is not what ultimately determines your success and, more importantly, your happiness. In my opinion, constantly striving to do better, to be better, and to continue to grow and learn is where success lies.
Image via iStock.