Kidding ourselves about our reality

In its most simplistic form, planning is the process of charting a course from where you are today to where you want to go.

The first step is to become crystal clear about what I call your current reality, or where you stand now.

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I used to think that being very clear about your current reality was the easy part of planning. Depositphotos 6718192 S 2015

Once you did that, the hard part started: Making guesses about other things, like where you want to be in 20 years.

Defining your current reality should indeed be the easiest part of the process.

It’s certainly a matter of fact. But apparently getting this clear is harder than I thought.

Many of us may not know where we stand with respect to our goals.

In fact, we may not want to know

But how can you expect to make progress if you have no idea where you’re starting from?

Over the years, I’ve noticed that the biggest differences between people who reach their goals and those who don’t is knowledge of where they stand in the first place.  

For example, when I ask financially successful people for a balance sheet showing their assets and debts, not only do they know what a personal balance sheet is, they often have one that is relatively current.

The point here isn’t that a balance sheet leads to guaranteed financial success.

But if we’re to have any hope of getting to a destination, it helps to start by being very clear about where you’re leaving from.

In this instance, a balance sheet can help with that clarity.

If you’re unhappy with your situation and want to make a plan to change it, start today by defining where you stand.


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Carl Richards


Carl Richards is a Certified Financial Planner and a columnist for the New York Times, Morningstar magazine and Yahoo Finance. He is author of 2 books, The Behavior Gap & The One-Page Financial Plan. Carl lives with his family in Park City, Utah. You can find his work and sign up for his newsletter (which has an international audience) at

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