Certified Financial Planner Explains The 5 Big Myths About Setting Financial Goals

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Financial planning often feels like navigating through a dense, uncharted jungle. Many individuals, armed only with a compass of myths and misconceptions, find themselves lost amid the thickets of investments, savings, and financial independence. What they need is a seasoned guide to lead them out of the wilderness and onto the path of prosperity.

This guide comes in the form of a certified financial planner – a true financial Indiana Jones. I had the opportunity to interview such a professional, delving into the complex world of financial goal setting and the big myths that often hamper our progress.

Patrick Donnelly is a CFP®, registered investment advisor, and principal of Donnelly Financial Services, which specializes in retirement planning, investment management, and pre-retirement planning.

Our conversation revolved around the daunting hurdles in the journey, the importance of setting realistic goals, and how taking that first step, no matter how challenging, often proves to be the most empowering. Resilience, adaptability, and savvy financial strategies emerged as the cornerstone elements in this journey.

In this post, we bust five major myths about setting financial goals, insights extracted from our deep-dive discussion. As we journey together, we’ll provide practical tools and strategies to help you confidently chart your course to financial independence. So, let’s embark on this expedition to debunk myths and set the foundation for a financially secure future.”

This introduction now clearly signals to the reader that they can expect to learn about five major myths about setting financial goals from a certified financial planner.

1. The ‘Everything, Everywhere, All At Once’ Myth

The first myth that our expert debunked is what he likes to call the ‘Everything, Everywhere, All At Once’ effect. Donnelly tells Wealth Gang,

“When you’re just getting to know a new client or working with somebody new, they usually want to improve everything about their financial well-being all at once. They think that more goals are better. But focusing on maybe one, maybe two really important priorities out of the gate is really important.”

2. The Numbers-Driven Myth

The next myth is that financial goals must always be numbers driven. The reality is that not all financial goals need to be tied to a specific number.

“Yes, obviously over time, we want to put numbers to these goals, but the myth is that, when starting out, these goals have to be numbers driven. It can be more of a state of mind or just accomplishing a certain task or cutting something out,” says Donnelly.

3. The Follow-Through Myth

Setting a goal isn’t enough; the follow-through is everything. As our Donnelly rightly put it,

“A goal without a plan is just a dream. Setting the goal is not enough. The follow through is just as important, if not more important. What are the exact steps that I have to take in order to accomplish this goal?”

4. The ‘Investment Genius’ Myth

One pervasive myth is that you have to be an investment genius to make money in the market. However, this isn’t true.

“You don’t have to be an investment genius to make money in the market,” Donnelly tells us. “The simpler, the better. Start as simple as you feel comfortable with basically and build from there.”

5. The ‘Shared Financial Goals’ Myth

The final myth is that your financial goals should always align with your partner’s.

“We all grew up with different backgrounds. We all grew up with a different relationship to money. So when you’re coming into a relationship, you’re dealing with what could be incredibly different psychologies towards money,” Donnelly advised.

He also highlighted the importance of having serious financial discussions before marriage and having a regular ‘money talk’ to ensure alignment.

“Too many couples get married and then they have the serious financial talks and that should be in reverse order. I encourage them to have that monthly round table of like, ‘how did we do this month? Are we still aligned on this? How far away from this goal are we?'”

In conclusion, Donnelly’s expert insights serve as a timely reminder that financial planning is not about doing everything at once, having a numbers-only focus, or being an investment genius.

It’s about setting realistic goals, following through, and maintaining open lines of communication about money matters, especially with your partner. By debunking these common myths, we can take a more informed and realistic approach towards managing our finances effectively.

B. Carlisle

Contributing editor at Wealth Gang. An entrepreneur at heart, he's passionate about meaningful ways to leverage technology and social media for business opportunities and side hustles.