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The Benefits of Purpose-Driven Investing

The Benefits of Purpose-Driven Investing

Does Purpose-Driven Investing sound a little too touchy-feely for you? Don’t worry, it has many real-world benefits.  

Benefits of Purpose-Driven Investing:

It fits your personality.

Trying to fit a square peg in a round hole usually ends in frustration and failure. Many investors have been trying to do just this. Not all of us have the time, skill, or even the desire to be actively involved in our investments. Purpose-Driven Investing doesn’t box you into a one-size-fits-all system. You will learn your Investment Personality in a later lesson and then an investment strategy based on your specific Investment Personality.

It is more intuitive.

It is more natural and in line with how we think about investing. Again, we are outcome-focused. We tend to compartmentalize things and think in terms of reaching individual goals. Buying a new plasma TV produces different emotions and feelings than paying for our children’s college education. Not necessarily better or worse feelings, just different. Having separate investment accounts keeps these two very different goals mentally and physically separate.

It is easy to track progress.

Because each investment account is for a specific goal, you can instantly see how close you are to reaching each of your goals.

There are fewer risks.

Each account will be invested based on when you need the money and how close you are to having enough money to reach the goal for that specific account. You won’t unknowingly take more risk than you need to for any of your goals.

You have a greater chance of reaching goals.

Accounts with short-term goals can be invested more conservatively and accounts with longer-term goals can be invested for growth. As a result, you have a much greater chance of reaching both short and long-term goals.

You have the ability to prioritize goals based on importance.

Not goals are created equal. Even though you may have eleven different goals you’d like to achieve, some are certainly more important than others.  Purpose-Driven Investing lets you easily add weight to more important goals. If you reach your more important goals, you can invest in your less important goals.  

Purpose-Driven Investing turns investing on its head.  

Rather focus on the process, it focuses on the outcome. Do you want an investment with a low standard deviation, high alpha, and low P/E ratio or do you just want to put the kids through college, buy a house, and enjoy a nice retirement?

In order to achieve your goals as quickly and efficiently as possible, you must first save and then invest those savings effectively. More on that in upcoming lessons!

The proceeding blog post is an excerpt from The Six-Day Financial Makeover: Transform Your Financial Life in Less Than a Week!, available now on Amazon.


About the Independent Financial Advisor

Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.

Reach us at (949) 305-0500