What's the money for? I had an ex-colleague named Ian Wells make me aware of this brilliantly direct question as it cuts through all the crap and demands a straight answer from someone.
What is your money for? Money needs utility....purpose.
In my own plan, I have the following purposes for my "pots"
Main Residence - store of wealth and will be sold to fund lifestyle from age 65. Live in Italy (house already owned with no mortgage)
London flat1 - will sell to fund once in a lifetime trips with wife and daughter. These will start when daughter is old enough to appreciate them and likely to start in 3-4 years time
London flat 2 - 50% of proceeds to do same as above and 50% for daughters house deposit fund
pension pot - provide £12.5k income pa once work has stopped - 65-70 years of age - need to add another 100k to it in next 13 years to reach target
My wife has had no previous direction but now has her own pot strategy and purposes to add to the above. We also have an ISA pot for my daughter that will be worth £60k in 14 years time which she can use for further education if she chooses; or other viable pursuits.
The above motivates me to act; I am creating a compelling future and one that doesn't mean waiting until I stop work either. I may not reach 65!
See if these answers feel different to you when you read them...
What's your pension money for? I need it to live on in my retirement ?
What's your pension money for?
I intend to use it to support a list of 10 trips of a lifetime for my wife and I. Then I will draw £7,000 a year from it and even after that, there should be some left over for my daughter to give her pension savings a boost when I'm gone.
It's apparent to me which person is more likely to achieve their goals and is inspired to do more now to make them happy. We need to be clear and precise on what we want to happen. It's a thing in golf, where they say to pick as small a target as you can when playing a tee-shot as it is likely to help make your miss less so. If we aim big, we will miss big. Aim small and miss small.
Where are you aiming?