Financial Intentionality – What Is Your Reason
It is not hard to guess what I am talking about when I say intentionality. Obviously I am talking about doing things with a direction, a purpose, a reason, an intent. Recently I listened to a podcast (I wish I could remember which one) that talked about the importance of being intentional in your financial choices and decisions. So I wanted to talk a little bit about my, slightly alternate view on that. I also list my (current) intentions around my finances.
You don’t have to know what you want to have intentionality. I know that may sound backwards, but it is true. At least on some level. When you are meandering along a path by a river, you may uncover some amazing sights. Wonderful trees, birds, flowers and other nature-like things. It may not have been your intention to see any specific one of those things, but if you set out along that river wanting to see nature, you were being intentional.
I took a trip to Europe around ten years ago, and found myself meandering at least twice…
The first time was in Venice. The advice that the tour guide gave us was to leave our maps in our bag and just wander around. The city is not that large, so if you get lost you can find the sea or large river and follow it around until you find the rail umbilical cord that connects the city to the mainland. My immediate reaction was to worry that I would not find all the places that I wanted to see. My organised brain wanted a step by step plan and route so I didn’t miss out. After a quick internal debate, I decided to trust the guide, placed the map into my bag and headed out.
Ten years later I can still remember the lunch I had, sitting in the middle of an undiscovered courtyard. A single large tree shaded much of the area with its canopy, while still allowing washing to receive enough sunlight when hung out of the windows to dry. Compared to the hustle and bustle of the tourist destinations, or even just smaller canal bridges, this courtyard was completely empty. I sat there with my partner for around an hour, eating lunch, reading, and just enjoying the scene. It could have been straight out of a movie. Not a single person came by during that time. It was easily my highlight; discovered accidentally when not remembering how to retrace our steps after buying our lunch.
The second occasion was in Paris. I had just finished my third day being a tourist around the city. I had seen all of the places I wanted to. Or rather, I had seen all the places I had planned to and was on my way home. Just enough time for a rest at the hotel before heading out for dinner. On the way home I happened to be walking down a road (or should I say Rue) when I noticed a sign saying “AMOUR” in red neon. Despite feeling like a rest at the hotel after a day spend looking at buildings would be perfect, I decided to venture inside after I noticed that it was a cafe.
While walking through a very average looking interior, I decided to try the outside area. After all, Australians love their alfresco dining (when the temperature permits). I had spent the day looking at a large array of different buildings, so was delighted to find the alfresco area was actually a courtyard, nestled in between three multistory buildings with thick green vines crawling up the side of two of them.
In the courtyard were a collection of tables on a stone floor. Beyond the normal seating was a slightly raised pathway around a central green garden. The pathway was just long enough to accommodate five tables with room to squeeze past each of them. I quickly went and selected the third one, ordered a coffee and remained there enjoying my relaxing new find for a good hour. Feeling rejuvenated I then headed out for dinner.
The Non-Specific Intentionality
In both of the instances above, my most vivid memory was one that came from what I think of as non-specific intentionality. I intended to try something new, but didn’t know what or where it would lead. I knew that I wanted something good, fun, interesting or entertaining, but didn’t know exactly what.
The reason I call that non-specific intentionality is that while I didn’t know exactly what I wanted, I was happy to see what I could find. I did not consciously make a decision to eat lunch in a stunning courtyard, or to visit a cute out-of-the-way cafe alfresco area. However I made a decision to see what would happen – I went looking.
The intentionality was still there. I intentionally chose to leave the map, thereby opening up the possibility of discovering something new. I intentionally decided to see what the cafe could bring despite being tired. In both instances I did not start the day with a specific decision to find those places, or even that sort of place. I did, however, start the day with a decision to allow it to occur – non-specific intentionality.
While my definition of non-specific intentionality may not be perfect, I hope it made sense. I wanted to show that intentionality doesn’t have to be choosing something specific. It can be, and in finance often will be, but does not have to be. Even simple examples are not always specific intentionality. Going to university may actually be to help you get an idea of what the specific career you want is.
So how does that map onto finances? And my finances specifically…
My intentionality around finances is slowly getting stronger. Initially I only wanted to save X dollars, or earn Y amount. I only really considered specific intentionality.
Over time this view had broadened. I am sure it will continue to broaden even further too. I have only really been thinking about this for a month or two. There is plenty more to consider. Currently my intentionality has morphed in slightly more non-specific directions. Rather than saving X, I am now looking at asset allocation percentages. Rather than earning Y, I am considering income streams. This is not intended as a complete list, however the following are some of the areas I have been giving specific though to.
My Financial Intentionality
- Asset allocation
- Rather than just looking at hitting specific goals, I am also trying to keep a balanced wealth picture. A massive stock market rise is not money in the bank until you sell. Markets go up and down.
- Higher risk investments
- Being quite conservative by nature, I am branching out into higher risk investments. My most recent investment was made in a small company that I believe has good longer term prospects. The price was heading down to a level that seemed undervalued to me, so I bought it. Just over 2 months later and that company is now valued a little over 50% higher than it was. It may crash and burn, but if not there is room for a large upside.
- Having got rid of my mortgage after paying off my house, I have thought long and hard about debt. This ties in well with the higher risk investments, but at a lower risk level. Leverage (specifically borrowing money) allows you to get higher returns (and also allows larger losses) on traditionally lower risk investments like property.
- Tax effective income
- I have focused more on superannuation and my contributions.
- Tracking my finances
- I now track my finances with a more holistic picture.
- Passive income
- I also track my passive income in the form of dividends and interest. Yes, I know I am missing Q3 2016. It is on its way.
- Financial intentionality
- Is this self referential?
What areas are you being intentional about? Are you finances one of them?