Investing is rooted in numbers. That causes many of us to see our definition of success as a function of numbers; often, a very specific target number. Many financial gurus will urge you to think of your wealth aspirations in terms of a fixed figure. Once you hit that goal, you can set down your pen and stop working – it’s time for retirement!

A common formula around generating this number involves looking at the trajectory of your likely earning power and the lifestyle you’ll want to maintain into retirement. Some will counsel breaking down the number as simply as possible. They’ll advise that you factor in the general rule to withdraw 4% from your savings each year; when that is enough to live on, you’ve crossed the finish line. Or they’ll advise you to aspire to accumulate a certain multiple of your salary, such as ten times your annual salary when you hit age 67. It’s easy to see the appeal of numbers – they lend themselves to logical, binary ways of understanding the world. We can easily track our success or failure based upon how the numbers – in this case, our stock portfolio – fared compared to the benchmarks we had set.

A New Attitude Toward Wealth – More than Just the Numbers

But this narrative is also a bit simplistic – at least in terms of thinking about wealth. It risks blinding us to all of the many other attributes that make up a true portrait of what wealth looks like. We gravitate to a strict view of the numbers because it’s hard to resist a simple narrative. It helps explain why so many of us love the simplicity of sports and sports movies – there’s little ambiguity about a scoreboard. It very clearly and simply breaks down for us who is ahead and who is losing. And yet even the scoreboards don’t tell us the whole story.

If you’ve ever watched the classic movie Rocky, you know that Rocky loses at the end of the movie (spoiler alert!) – but we still see him as a hero. Even when our hometown team falls short at the end of the season, we maintain our loyalty to them. The Cleveland Browns have been consistently awful, yet they still maintain a huge fan base! Not everything that matters is reflected in the final score. And the same is true in wealth. That’s why a key precept of wealth management is that no single size fits all. There’s no number that is right for everyone.

Questions to Determine Your Personal Financial Goals

  • Should you keep working into your 60s even if you could technically be retired already? Why work if you don’t have to?
  • Should you downshift your work focus and take up less lucrative work that is more appealing to your interests? Maybe something you’re passionate about?
  • Should you defer taking Social Security for as long as possible?

Any answer is going to depend not just on your personal situation, but on your personal values. And those can’t always be neatly explained by the numbers alone.

We are very obsessed, as a society, with the metrics tracking the market – the Dow is down, the S&P is underperforming, and so on. But like so much financial chatter, this is largely news compared to the underlying value of the companies in the marketplace. My advice is to take a step back from a focus on your rate of return. This isn’t a race, in which the person with the fattest portfolio “wins”. Consider what kind of lifestyle you want to lead – what makes you happy, what you hope to do for the people in your life to feel like you have done right by them. Think about the full picture – not just the numbers.

Ask yourself that key question – what does wealth mean to you?

Reach out today to learn more.


About the Author:

Mark Tepper, CFP

Mark Tepper is President and CEO of Strategic Wealth Partners. While he works with a variety of clients, Mark specializes in the wealth management and financial planning needs of entrepreneurs. Since entering the financial services arena in 2000, Mark has gone on to become a Million Dollar Round Table Top of the Table qualifier, placing him in the top 0.1% of financial advisors in the country. A well-known financial commentator, he appears regularly on CNBC’s Street Signs and Closing Bell, as well as FOX Business. Additionally, he is the author of Walk Away Wealthy – The Entrepreneur’s Exit-Planning Playbook, and Exceptional Wealth. Beyond that, he has been featured in numerous publications, including The Wall Street Journal, Kiplinger’s, and CNN Money.

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