A Great Time to Review and Plan

Hi

For many of us the start of each calendar year prompts us to reflect and set plans for the coming 12 months. The start of a new financial year is a great time to reflect, review and reset our plans for financial independence. Many financial milestones are reported at this time of year, making it easy to take stock of our position.

Over the next couple of issues I will share with you insights on financial goal setting, review and planning, which you can implement especially at this time of year. I’d like to start by reflecting philosophically on the purpose of wealth creation by sharing with you this classical story, which was related to me recently by my mate and mentor, Gihan Perera:

An American businessman was at a pier in a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellow-fin tuna. The American complimented the Mexican on the quality of his fish and asked how long it took to catch them.

The Mexican replied only a little while.

The American then asked why didn’t he stay out longer and catch more fish?

The Mexican said he had enough to support his family’s immediate needs.

The American then asked the Mexican how he spent the rest of his time.

The Mexican fisherman said, “I sleep late, fish a little, play with my children, take siesta with my wife, Maria, stroll into the village each evening where I sip wine and play guitar with my amigos. I have a full and busy life, senor.”

The American scoffed, “I am a Harvard MBA and could help you. You should spend more time fishing and, with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats, eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman you would sell directly to the processor, eventually opening your own cannery. You would control the product, processing and distribution.

“You would need to leave this small coastal fishing village and move to Mexico City, then Los Angeles and eventually New York City where you will run your expanding enterprise.”

The Mexican fisherman asked, “But senor, how long will this all take?”

To which the American replied, “15-20 years.”

“But what then, senor?” asked the Mexican.

The American laughed, and said, “That’s the best part! When the time is right, you would announce an IPO and sell your company stock to the public. You’ll become very rich, you would make millions!”

“Millions, senor?” replied the Mexican. “Then what?”

The American said, “Then you would retire. Move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siesta with your wife, stroll to the village in the evenings where you could sip wine and play your guitar with your amigos.”

(Original author unknown)

The purpose of Financial Planning is to help you make informed choices about the balance of your lifestyle now and your lifestyle of the future.

What are your lifestyle dreams?

How much current lifestyle are you willing to choose to invest in the achievement of the dreams you have for the future?

Conversely, how much of your future lifestyle are you sacrificing because of the choices you are making right now?

Warm regards

Matt Hern

Read Part 2 of this three part series.

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Matt Hern trades as FINDRE
(Empowered Wealth Pty Ltd t/as)
ABN: 21 592 525 720

Phone: 08 9467 7320, Fax: 08 9463 7848
PO Box 259, Bull Creek, Perth, Western Australia 6149, Australia
Website: www.MattHern.com.au Blog: www.Money-Guide.com.au

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