By: AnnaMarie Mock, CFP®
In this video, AnnaMarie Mock, a fee-only Certified Financial Planner at Highland Financial Advisors, walks you through the third step in maximizing the financial health of pharmaceutical executives: defining a purpose for your human and investment capital. Drawing from her personal experiences, AnnaMarie explains the importance of setting clear, specific, and attainable financial goals. She also outlines a step-by-step framework—Identify, Quantify, and Solidify—to help you create a purpose for your assets and achieve long-term financial freedom.
Introduction
Hi, my name is AnnaMarie Mock, and I am a fee-only Certified Financial Planner® at Highland Financial Advisors. If you like my content, please click on "Subscribe" below, and you'll get notified of any new videos as they're released.
Step 3: Defining a Purpose for Your Human and Investment Capital
Today, we will talk about step three of how pharmaceutical executives can make the most out of their financial health. Step three involves defining a purpose for your human and investment capital. But first, I'm going to get started with a personal story.
Personal Story: My Journey of Financial Planning
Growing up, my parents instilled two philosophies: always living below my means and saving for the future. As a child, every time I received a cash gift, I would spend some on myself and put the rest in savings. As I got older and entered my teenage years, I realized I had saved enough to buy my first car. But now, as I reflect back, I ask: for what purpose was I saving the money? Would it have been a better outcome if I had invested my savings? And was it just a coincidence that I had enough for that car?
The Importance of Defining a Purpose
This ideology of saving and financial planning doesn't develop overnight, which is why some people lose momentum over time and make ad hoc decisions about goals or financial decisions in general. This is amplified by the fact that individuals usually don't have a defined human and investment capital purpose.
Creating a Purpose for Your Assets
To create a purpose for your assets, you generally want to ensure that you're going through a goal-setting exercise where you identify, quantify, and solidify your plan.
Step 1: Identify
Identify—This is where you formulate your vision of what you want to accomplish and what the future looks like. You want to ensure your goals are clear and specific, eliminating any vagueness. You also want to ensure they are ambitious yet attainable, as this is supposed to motivate you, not cause additional stress that will lead to delays.
Step 2: Quantify
Quantify—This involves knowing how much something is going to cost. When we're talking about retirement, it won't necessarily have a finite amount. But if your goal is to have a vacation in two years, you can put a price tag on that—or at least a general idea of the cost.
Step 3: Solidify
Solidify—This step involves understanding your cash flow and the availability of other assets. In other words, this is about balancing your needs of today with your goals for tomorrow.
A Visual Illustration: The Glass Cylinder Analogy
Picture this: you have a glass cylinder on a table, and next to it are rocks, gravel, and sand. The rocks represent your long-term goals, the gravel represents your short-term goals, and the sand represents your day-to-day activities. What's the best way to put all of that content into the cylinder?
If you start with the sand, you won't be able to fit everything. Instead, if you put the rocks in first, then the gravel, then the sand, you'll be able to fit all the contents. This is just an illustration of the importance of first focusing on the long-term to dictate your short-term decisions and day-to-day activities and behavior.
The Importance of Monitoring
So, now that you've gone through the goal-setting framework and identified, quantified, and solidified your plan, one of the most important steps to do continuously is monitoring. This is where you keep your "rocks" in focus. It's easy to let day-to-day routines get in the way of your long-term picture. You want to set time aside to continuously look at those rocks and gravel—your long-term and medium-term goals—to ensure that your short-term behaviors are helping you get there.
Working with a Certified Financial Planner
If you're having difficulty focusing on what you should be doing today versus what you should be doing tomorrow, I highly recommend working with a Certified Financial Planner®. They will partner with you to ensure you stay on track.
Conclusion: Achieving Financial Freedom
By following this framework and going through the goal-setting exercise, you will ensure that you can build wealth and live your life based on your definition of financial freedom.
If you want to schedule an initial consultation, please feel free to click on the link provided. Thank you and see you next time.
AnnaMarie Mock is a CERTIFIED FINANCIAL PLANNER™ and Partner at HIGHLAND Financial Advisors, LLC, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, employer retirement planning, and investment management. AnnaMarie graduated from Montclair State University with a degree in finance and management and successfully passed the CFP® national exam in 2016. She has been working at Highland Financial Advisors since 2013 as a fee-only, fiduciary Wealth Advisor and is a member of NAPFA.