Tell me what you don’t want

Good financial planning usually starts with questions about what you want your money to help you achieve. “What are your financial priorities, objectives and goals?” We retirement planners are pre-programmed to ask when you want to retire, how you want to go about retiring, and what you want to do with yourself, once you have stopped work. The majority of our clients know what they want, and find those questions easy to answer. But a healthy proportion of them find it pretty hard to imagine what life in retirement will look like and, therefore, what their financial objectives should be.

The “model of inversion” tells us that there is another way of working out your financial objectives are. In this model, the idea is that “problems are often best solved when they are reversed”. With goals and objectives, the concept of “anti-goals” can be a good starting point.

Andrew Wilkinson first publicised this idea, stating that we should focus on what we don’t want (our anti-goals). He and his colleague started by picturing what their worst possible day would look like.

They got the idea from Charlie Munger, Warren Buffett’s business partner, who famously said “tell me where I’m going to die, so I’ll never go there.”

Wilkinson’s list for the worst possible day included long meetings, a packed calendar, dealing with people he didn’t like or trust, having obligations to others, being in the office, travelling and being tired. He used that list to create another list – of things he wanted to achieve – such as never scheduling early morning meetings and sleeping in, when you feel like it.

The beauty of having “anti-goals” is that they account for your personal quirks and preferences. This isn’t anything new – and, in fact, the dating world may be strides ahead in this area. Deal-breakers and red flags are all common when it comes to picking a partner. Could retirement planning learn from dating?

If you aren’t sure what your goals for retirement are, perhaps the best starting point is to use “anti-goals”. These might include, for example:

  • Having to work until 75
  • Not being able to afford to travel or take breaks when you have stopped work
  • Living in the same house as you live in now
  • Being worried about money in retirement

Those “anti-goals” can then be inverted, so that you can decide and articulate what you do want. Working out how to avoid certain outcomes can be as useful as working out how to achieve the things you might want. Instead of asking what you want to achieve in retirement, we might start asking what you want to avoid!

Philip Wise |

Managing Director and Chartered Financial Planner

This guide is for information purposes and does not constitute financial advice, which should be based on your individual circumstances.

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