Start at the End

Planning, whether it be financial planning or planning anything in general, can be a difficult thing to navigate.

Often we speak to people who have a stated plan to “get rich” or “get out of debt” or “save for a house deposit” or “retire” but have no real idea of how to achieve the outcome.

Usually the best way to begin planning for a desired goal is to “start at the end”

Let’s take the goal to “retire” and then start at the end.  Think about your desired retirement age, the lifestyle you envision and the money you’re going to need to fund that lifestyle.  There is more substance to having a goal of finishing work at 62 and living a comfortable lifestyle requiring $65,000 per annum than there is to the vague goal of “retirement”

Once you know the end result you’re looking to achieve it is far easier to establish a plan to get there.

Strategies such super contributions, buying an investment property, increasing loan repayments and investing in shares can then be considered with a view to increasing your asset base to a level that will achieve the end result.

Another example – “saving for a house deposit”.

Saving a house deposit for a home worth $400,000 is very different to saving for a property worth $1M.

By starting at the end, you may arrive at a goal of saving $100,000 by the end of 2026 to purchase a house worth $650,000.  It is far easier to plan for that end goal than for the vague “save for a house deposit”.  You’ll be able to have a structured plan of regular saving at a suitable level rather than a vague idea that you should just be saving something.

It works for pretty much any goal, not just financial, so give it a try.