Understanding financial goals

Boxers & Briefs Podcast #2: How to set financial goals with Yi Ping Ge.

In a candid discussion with Yi Ping, Chief Financial Officer and Partner at Gilligan Sheppard, we explore the fundamental aspects of financial goals in business and personal life. With an engineering background that led to a career in finance, Yi Ping brings a unique perspective to the conversation about how financial planning intersects with personal passion and business success.

The essential role of financial resources

“Making money isn’t everything, but it’s an essential part of business sustainability,” Yi Ping explains. While some people might be reluctant to acknowledge the importance of financial goals, she emphasises that without proper financial resources, a business cannot survive, let alone thrive. This foundational understanding is crucial for both personal and business success.

Yi Ping’s own journey from engineering to finance illustrates an important lesson about career choices. She discovered that her true passion lay in finance rather than engineering when she realised others could perform engineering tasks more efficiently. This experience taught her the importance of aligning one’s skills and passions: “You need to carefully consider what you’re good at and what you’re passionate about,” she advises.

Planning for the future

Looking ahead, Yi Ping sees technological advancement as creating even greater disparities based on financial resources. She points to potential future developments where financial capability might determine access to life-extending technologies. While this might seem like science fiction, it underscores the growing importance of long-term financial planning.

When it comes to setting financial goals for a business, Yi Ping emphasises the importance of understanding stakeholder needs:

• Start with the shareholders or owners
• Understand their personal financial goals
• Align business goals with these personal objectives
• Consider risk tolerance levels
• Create a sustainable plan that balances necessity with growth

Financial goals should never exist in isolation from values. Yi Ping shares a cautionary tale about a business partnership where the pursuit of profit led to compromised relationships. “Even if you achieve your financial goals but compromise your values, you won’t feel good about it afterward,” she warns. This highlights the importance of maintaining ethical principles while pursuing financial success.

Risk tolerance and decision-making

Understanding risk tolerance is crucial for both personal and business financial planning. Yi Ping explains that risk tolerance isn’t just about numbers – it’s about understanding how low your financial resources can go while still maintaining your essential needs and lifestyle. For businesses, risk assessment must consider:

• Impact on shareholders
• Effect on employees
• Sustainability of operations
• Alternative funding sources
• Worst-case scenarios

As organisations grow, communication becomes increasingly critical. Yi Ping emphasises the importance of clear communication with stakeholders, particularly when:

• Setting initial goals
• Monitoring progress
• Addressing shortfalls
• Adjusting plans
• Managing expectations

Keys to success

Yi Ping’s fundamental advice for successful financial planning centres on understanding your objectives. “You need to think about what’s tangible, what you want to achieve, and how to make it sustainable,” she explains. This means:

• Distinguishing between necessities and luxuries
• Creating realistic, achievable goals
• Maintaining sustainable resource allocation
• Regular monitoring and adjustment of plans
• Clear communication with all stakeholders

The path to financial success, whether personal or business, begins with understanding what you truly want to achieve. With clear goals, proper planning, and consistent execution, you can create a sustainable framework for financial success while staying true to your values.