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“Put simply, the time frame in which you make your decisions determines your logic. Things that make sense in the long-term might seem crazy to people who only think of the short term… [and vice-versa].”
This statement is so true in both business planning and decision-making, as well as personal planning. As this entrepreneur states in this article, having a long-term vision is critical to keep in-mind as you are faced with making decisions.
Elon Musk, Jeff Bezos, Mark Zuckerberg, among other extremely successful entrepreneurs know this and they make decisions with their long-term visions in-mind. This approach has led to their tremendous success, while other business leaders make decisions with their primary goal to improve quarterly earnings, and have seen sub-par performance (or at least are unable to match this level of success).
For example, in 2006 Elon Musk created and shared his own version of a long-term vision: in 10-years he would 1) create a low-volume car that, by necessity, would be expensive 2) use that money to develop a medium-volume car at a lower price 3) use that money to create an affordable high-volume car and 4) provide solar power. On July 20, 2016 Elon announced all four goals had been achieved! Imagine if instead of this long-term vision, he had focused on quarterly or annual earnings and profits; there’s no chance he would have made the difficult choices and investments necessary to help realize this vision.
In regards to personal-planning, creating a long-term vision for your life is the first step in enabling you to think long-term. Every day you will be faced with choices of varying degrees, and the choices you make will either benefit you in the short-run, long-run, or anywhere in between. Hence, prioritizing your goals and your vision is the next step. For our clients, this is often the most valuable part of working with us. We take you through a process to truly clarify, quantify, and prioritize your vision for the future, as well as all your goals in intermediary. With this in-place, we can then make decisions with that vision in-mind and pursue its realization, just as these legendary entrepreneurs have done with their businesses.
How To Create Your Long-term Vision:
To help create this long-term vision for our clients, a few of the important questions we guide them through include:
- If we were meeting here 3 years from today – and you were to look back over those 3 years to today – what has to have happened during that period both personally and professionally, for you to feel happy about your progress? Prioritize this.
- How about 5-years from now? 10-years? 20-years?
- Describe for me in detail the most highly fulfilling vision of life you can imagine (including the financial, time management and environmental attributes of that life) both now and in the future. Move? Vacations? Gifting? Kids / Grand kids? Time working? New Career? Start a business? Sell a business? etc. Prioritize this.
- If you had complete financial security, how would you spend your time?
- What's important about money to you? Goals? Values?
Then with this written down, really focus on quantifying (in dollars and in time) and prioritizing these goals and values. Once you have them prioritized, begin to develop a plan and decision-making process in which you incorporate these goals and values into every decision (including how you spend your money and your time). This may be difficult at first, but once it becomes habit it will be easy and natural.
Please let us know if you have any questions!
Odyssey Wealth Design continues to provide financial planning and wealth management to clients in Orange County, Irvine, Newport Beach, and around the country.