Financial planning should be about the journey and the destination

“In the fixed mindset, everything is about the outcome. If you fail — or if you’re not the best — it’s all been wasted.” This passage is from “Mindset,” Stanford University professor Carol S. Dweck’s book on the psychology of success. It describes a restrictive approach that I’ve seen some people take to financial planning.

Investors with a “fixed mindset” often miss out on living their lives fully, sacrificing their quality of life today for far-away financial goals. Those with a balanced perspective, on the other hand, plan for the future, but don’t forget to enjoy the present.

Destination-driven investors

Investing offers a prime example of the troubling, destination-driven mindset that Dweck describes. It’s generally accepted in investing, that, all other things being equal, the longer the time horizon, the more likely there will be a positive outcome. As a result, people are constantly encouraged to focus on the long term. The underlying message is: Earn and sock away as much as you can now, try not to look — for as long as you can — at the present, and you’ll be rewarded down the line.

This logic is financially sound and has worked for investors for decades, but the unintended consequence is an obsession with short-term market volatility. With all of their attention and resources focused on achieving long-term goals, investors often agonize over the day-to-day market movement they associate with their ultimate success or failure.

Some people subjugate, and even ignore, their quality of life during their primes, in hopes of having a high quality of life later on, when they might not be able to enjoy it. It’s as if the bulk of their working lives are merely a preamble to the more significant financial milestones they hope to achieve many years from now. This seems an oddly contradictory, if not vicious, cycle.

Why investors prioritize the future

Part of the reason for this fixation on the future is that financial professionals tend to make recommendations based solely on outcomes, and don’t spend enough time or energy understanding the more immediate, human side of the equation.

And it’s no wonder: Many fundamental wealth management questions revolve around the destination, rather than the journey. For instance:

• How much will I need to retire?
• How much do I need to save to pay for my child’s college education?
• What withdrawal rate will allow my savings to sustain me throughout the rest of my life?

Yes, these questions are important, and they must be answered based on each investor’s specific circumstances and goals.

But rarely do you hear financial advisors asking clients, “Are you happy?” Perhaps that’s because it’s a much more difficult question which steers advisors away from the analytical, numbers-based terrain in which they’re most comfortable.

How investors can find balance

As a financial advisor, I have many clients who can’t enjoy the now without feeling that their future is totally secure. And I know clients who can’t fathom the idea of de-prioritizing their present happiness for a future that’s anything but a given. The ones who seem most content, however, understand the need to plan for the future, but know how to enjoy themselves in the present.

How do people reconcile these seemingly contradictory mandates? Perhaps they have the growth mindset that Dweck says “allows people to value what they’re doing regardless of the outcome.” They might also be open and introspective enough to let go of the things they can’t control and change the things they can.

It also helps to work with an advisor who believes that balance is important to the success of any long-term financial plan. To encourage this perspective, some advisors take a psychological approach to new client meetings, asking questions like “If money were no object, what would you do with your time each day?” or “What is your first memory dealing with money?” This way, clients can get help map out their road to future financial success and let themselves more fully enjoy the trip.

Gavin DiStasi is a financial planner and the co-founder of Topel & DiStasi Wealth Management. Learn more about Gavin on NerdWallet’s Ask an Advisor. This article first appeared at NerdWallet.