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The Success ParadoxSM described the misery that high income can sometimes bring. Escaping this paradox can be very simple. Unfortunately, most people make it very complicated. Escaping The Success ParadoxSM requires the courage to live according to your own values, not the values of others.

Vision
To build a satisfying life, we must find values that compliment those of our life partner. Dan Sullivan of The Strategic Coach suggests a specific question: what needs to be true three years from now in order for you to feel happy with your progress? According to Dan, three years is far enough in the future so that you do not feel bound by today’s obstacles, but near enough that moving toward that vision has immediate implications.

Goals
Much of the misery of The Success ParadoxSM comes from moving toward goals that are not the most important to you.

Creating a plan to pursue the goals that are right for you will allow you to leap out of bed, thrilled with the opportunity to make progress toward goals you believe in. Now ask yourself: would you rather leap out of bed in the morning in your old house, thrilled with the opportunity to pursue meaningful goals, or drag yourself out of bed in your new house burdened by the knowledge that you have a monumental mortgage to pay before you can begin chasing your dreams?

Once the goals are identified, we must develop a plan for achieving them. The plan must be specific and simple. Such plans are not difficult to make. There are thousands, perhaps millions, of financial plans gathering dust on the shelves of affluent Americans. These plans contain much of what we have just discussed and yet no progress is being made. Why not? First, insufficient focus was placed on goal setting. Second, the plans have no daily mechanism for following the plan.

We have all heard that a journey of 1,000 miles begins with a single step. Nowhere is this more true than in financial life planning. Plans must be followed little bits at a time. It is critical to have a simple system that acts as a guideline. This system must be written, specific and timely.

Spending
The most critical element of this system is spending. The minute we think of spending, we think of budgeting. Although budgets do not work for most people, anyone can learn to spend only their available cash. In fact, most affluent people already spend only their available cash. The problem is that they have a lot of cash! A nice problem you may say, but that is The Success ParadoxSM. Affluence creates opportunities, but not without challenges. Creating the illusion of less cash controls spending.

Moreover, spending will become more enjoyable. Some people are racked with guilt any time they spend money. They do not know if they are saving enough. How could they? They do not know what they are saving for! These people get no pleasure from their spending because they are burdened by a fear of running out of money.

Investments
Next, an appropriate investment plan must be created for growing funds for future goals. There are no good or bad investments. A client of ours once said: “All investments look good until they don’t.” This was said in jest, but it is profoundly relevant for financial planning. Maximizing the probability of achieving financial goals does not require investments with the highest possible return if all goes well. Maximizing the probability of achieving financial goals requires a portfolio with the highest possible return if all does not go well.

A Plan
Finally, ongoing monitoring is necessary to keep the plan on track. Most financial plans are not followed long enough to achieve their goals. Plans take time to create dramatic results. Unfortunately, most of us need immediate results to keep us going. Achieving near-term goals motivates us to the next goal. Our short-term goals build on one another to create exponential results over time.

Summary
Escaping The Success ParadoxSM requires no magic. Escaping The Success ParadoxSM simply requires being true to yourself, building a plan and sticking to it. Tools have been developed in each of the areas mentioned above to help clients avoid The Success ParadoxSM. We call these tools The Systematic Financial Solution®.


August 2007

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