We often describe goals-based investing as a framework, an approach, or a methodology. A more complete and robust characterization would be to view goals-based investing as a discipline.
Though infrequently used in investment conversation, the term discipline implies more than a single process or mathematical methodology. A discipline can be viewed as a means to an end, a philosophy or mindset which, if practiced consistently and regularly over time, culminates in a type or degree of success which could not be achieved directly and immediately. The discipline of goals-based investing is a set of principles, regular calculations and personal reflections, ways of decision-making, and practices which govern our financial lives. The goal of this discipline is clear and quite different from the common goals expressed by Wall Street: to maximize the probability of achieving our specific financial goals.
Six principles foundational to the discipline of goals-based investing are stated, each of them crystallizing a concept or set of ideas discussed in prior podcasts. The willingness to “…practice radical self-awareness” is highlighted, as above all the goals-based investor must remain ever aware of his own behaviors and tendencies if long-term goals are to remain in focus.
- Speaker: Jack Parham – Chief Investment Advisor, Eton Advisors Group
- Host: Greg Dixon – Marketing Consultant, Eton Advisors Group