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The trajectory of life is often determined by a mere handful of important decisions. These pivot points have an outsized impact on your future.
When you read the life stories of historic figures, you quickly come away with a realization of just how much a few inflection points matter.
Perhaps you decided to go to a different college than most of your high school friends. Maybe you met your spouse there and raised a family together, now complete with grandchildren. All of this originated from the single pivot point of choosing one school over another.
The house that you decided to buy in one neighborhood instead of another impacted your friendships, social life, and the relationships of your children.
Pivot Points in Your Finances
Your financial life is no different. The path you take toward your most important goals generally rules out alternate routes. For good or ill, your financial choices serve as an anchor, keeping you from floating off in another direction.
Both money and time are finite resources. If you decide to allocate money in one area, it means you’re choosing not to allocate this money somewhere else. If you spend time in one way, you can’t spend it in another.
If you step back and look introspectively at your life, it’s likely that you’ll see a few events that changed everything. If you dig deeper, you might find that choices you made during these pivotal times were sometimes made casually without recognizing their importance.
How Can You Tell Where the Pivot Points Lie?
Often, you don’t have any inkling that any solitary decision might end up as consequential as those mentioned above. That’s the rub; all of your choices matter, but some will matter much more than others. All choices aren’t created equal. The ultimate chain of positive or negative events set into motion by a single decision can’t be fully known in advance.
It’s difficult, if not impossible to separate emotion from rationale when you make routine choices. If you don’t have long-term aspirations to guide you, it’s easy to go ‘around and around’ without making real progress.
One useful tip is to look at decisions beyond the “it’s a good deal’ aspect alone. Your financial life can easily get off track by following the path of ‘good deals’ that have little to do with your longer-term goals.
Some of the financial decisions you make are clear-cut and easy; other decisions are stress-filled and difficult. Day to day financial choices make up the fabric of your life, but career decisions, marriage decisions, and how to save/invest create the direction.
Good Financial Planning is the Key to Peace
We sometimes refer to financial planning as the place where ‘money and life intersect’. Decisions that you make in your personal life quickly spill over and impact your financial life also.
The pivotal points in your life often come packaged as dilemmas. Difficult choices between alternatives present both opportunities and dangers. When these important choices arrive, be sure to keep your primary financial goals in the forefront of your mind. That’s the best way to improve your odds of staying on track. Start there. Ready for a real conversation?
Related: 7 Crucial Questions Facing Investors