You make good financial decisions only within the context of your goals.

This may seem obvious, but think about the amount of time and energy spent trying to find the "best investment." Magazine covers are devoted to it, and books are written about it. There seems to be an entire industry built around this wild-goose chase.

But the reality is that there is no such thing as the best investment.

The idea that there is some mythical investment that we can label the best, without first considering how it fits into the context of your life, is crazy. It's like getting into a debate with a friend about whether to drive or fly before you've even decided where you're going. How can you decide on the transportation before you determine the destination?

This is true for all financial products. Life insurance, mutual funds, and even bank accounts can be judged only based on how well they help you reach your goals. Your goals are unique. So what might be right for you could be a disaster for your neighbor.


Instead of spending so much time searching for the best financial product, we're much better off taking the time to reflect on what is really important to us and then aligning our use of capital with those values. What good would it do to find the mythical best investment and end up with a bankrupt personal life? David Brooks highlighted a similar issue: Most of us are focusing on the wrong things if our goal is happiness.

So rather than reading the latest list of the "10 Best Investments for Every Investor," try asking yourself some questions to discover what's really important to you. To get started, I suggest you take a look at George Kinder's three questions about life planning.

I have to warn you that this can be a painful process, because it forces you to think about things outside the confines of a spreadsheet. Be patient with the process and realize that in the end it's not about the money. It's about your life.

A version of this post appeared previously at The New York Times.

Carl Richards is a financial planner and the director of investor education for the BAM ALLIANCE, a community of more than 130 independent wealth management firms throughout the United States. Visit Behavior Gap for more of Carl's sketches and writings.

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