What is Objective Investing? Part I
Goals and Objectives are Not the Same
Goal setting is at the core of financial planning and goals-based investing is nominally important to most advisory services. So much so that when an advisor is asked what makes them different, they all say the same thing.
But in another sense, goals and objectives are not the same thing. The second article will translate those into financial terms. And the third will integrate all of the variables you can control with the uncertainty of future market performance.
For our purposes now, goals are the material goods and planned events that deliver comfort and experiences that will enhance your life in some way. They can be short lived or long term, but objectives are more abstract and emotion driven. Objectives are not whims that may be rational or irrational, but instead they are the values that generate the positive emotions of satisfaction, pleasure or exhilaration.
What are these values? In his book, Secrets of a Passionate Life, Tal Tsfany defines what they can and should be:
It means that I understand that happiness comes from achieving things that manifest themselves in reality. No thought or idea that stays in my head will yield the gold coins of happiness and self-esteem. Values must be achieved and manifested in reality to be meaningful.
There is the link. Like money is earned by action applied to ideas, goals that can be purchased with money are earned by action applied to your ideas. In other words, you purchase goods and services with good and services. Money merely assigns a value to the transaction – which will be discussed in the next essay.
But ideas must come first. As human beings, we are volitional and rational, and both must work together for us to exist. Free will begins with the choice to think – or not. In turn, your values presuppose a choice; there are alternatives. And living with meaning and purpose demands higher level choices and require the effort of mental focus. The next alternative is the avoidance of death, which typically includes the appeasement of those who destroy. Only that gives the nihilists their power.
To help with your positive values, my book breaks those down into the four domains that are illustrated in the Site Map on page 182 of The Moneyball Method. And this is where the fun begins - the mental effort of creating your values inventory. As Tsfany explains, “The idea is to enrich your desired values with the specific space and time they need to become real.”
Think of it as physical exercise. Building value awareness muscles is like building bodily strength or aerobic endurance. It takes consistent effort and knowing the transformations you intend for that activity. To learn more, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/