Putting all the Pieces Together to Unlock Your Full Financial Potential

The following is adapted from Futurehack! by Scott Jarred.

At some point in your career trajectory, you might begin to contemplate a holistic idea of what success means for you. The first thing that comes to most people’s mind is money.

Unlocking your full financial potential, however, isn’t entirely about the money. It’s also about achieving your dreams. The money is the fuel for the rest of your life.

With that said, let’s take a detailed look at how you can put all the pieces together to unlock your full financial potential. Then, achieving those dreams may become more of a reality.

The Ripple Effect

Every financial choice has a ripple effect. If you throw a rock into a pond, you see the splash it makes — but the rock does more than just splash. It also causes ripples that extend out through the water and affect the whole pond.

A financial decision is the same: its ripples extend out and affect your whole life. You can’t just pay attention to the splash; you have to pay attention to the ripples as well. Every financial decision you make — whether it’s putting money in a 401(k) or a 529 college savings plan; paying off your house; paying off your car; buying life insurance, car insurance, or homeowner’s insurance; quitting your job; or investing in a business — has repercussions.

Dysfunctional Decisions Come from Operating in a Vacuum

Looking at financial decisions in a vacuum is like going to a specialist and saying, “My shoulder hurts,” and the doctor saying, “Great, let’s operate,” without considering the rest of your body. Perhaps the hurt shoulder is just a symptom of a greater problem, like a pending heart attack, which should be addressed first.

Yet, many financial advisors do operate in a vacuum. Why?

Because we live in a specialist society. Everybody specializes in something — one specific part of the body — and the bigger picture gets missed.

Playing Chess with Your Money; Not Checkers

The only way to make truly informed financial decisions is to have everything organized, to see the big picture of your entire financial world. That’s a lot of information, a lot of chess pieces that need to be managed. Well, you can’t play chess without a chessboard. You can have all the pieces, but if you don’t have a board to put them on, you can’t play the game.

To put all your financial pieces on the same game board, you need to break down the evidenced-based principles and rules that you are going to play by — and stick to them.

Just as you do with chess, you have to plan several moves ahead. Without a forward-planning process, you’re playing checkers, not chess. When you apply your rules to your financial life, you’re now playing chess and have a higher likelihood of success.

Too Many Pieces Playing Their Own Game

One big problem is getting chess pieces to work together for the common goal. This is called compartmentalizing.

On average you interact with thirteen financial institutions. Plus you’ve got your investment guy, your car insurance guy, your mortgage broker, your banker, your life insurance salesperson, your CPA, your attorney.

When’s the last time all those people were actually in the same room creating a comprehensive plan for your financial future? And often, even if those people do get together, things still get all mixed up. Why? Because there is no overall game plan. There are no rules. There are no overarching strategies or philosophies. This is how things work, even at the highest level.

Putting It All Together

Successful families have family offices, investment policy statements, a protection strategy, and a healthy balance sheet. Unsuccessful families very rarely put all those things together, coordinate them, or organize them. Rather than playing a strategic chess game, they are playing seven or eight different games all at the same time.

When you set core principles and rules to follow, then all those disparate pieces start working together to achieve the same objective: unlocking your full financial potential.

For more advice on unlocking your full financial potential, you can find Futurehack! on Amazon.

Scott Jarred is the CEO of Invst (formerly JarredBunchConsulting), specializing in providing comprehensive wealth management solutions for high-net worth individuals to protect and preserve their wealth. Jarred left corporate America more than seventeen years ago to build a company committed to making money work for people and to flip the traditional wealth industry on its head. Today, Invst has created an environment outside of Wall Street conformity, one that’s broken through the limitations of “financial planning” and instead focuses on financial positioning. Jarred is dedicated to providing smarter, faster, and innovative personal wealth solutions for his clients.