Episode 160: The Hidden Cost of Your Financial Plan: The Gap Between Expectation & Reality

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Are your financial planning wins leaving you feeling… underwhelmed?

Even with growing savings or a booming Canadian business, it’s easy to feel like you’re financial planning is falling short. That’s because most people chase numbers without defining what “enough” looks like in their financial plan. If you’ve ever hit a business or financial goal but still felt stuck, unfulfilled, or unsure what comes next — you’re not alone.

In this episode, you’ll discover:

• Why “happiness is the gap between expectations and reality” — and how that shapes your financial planning goals
• How to reverse-engineer Canadian financial freedom a financial plan that focuses on using inputs, not just outcomes
• The step-by-step framework to define what success actually looks like for your financial plan — so you stop chasing and start living

Ready to stop running on the financial planning treadmill and design your version of enough? Hit play now and learn how to shrink the gap between your expectations and your reality.

Resources:

• Ready to take a deep dive and learn how to generate personal tax free cash flow from your corporation? Enroll in our FREE masterclass here. 
• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey!
• Discover which phase of wealth creation you are in. Take our quick assessment and you’ll receive a custom wealth-building pathway that matches your phase and learn our CRA compliant tax optimized strategies. Take that assessment here.
• Dig into our Ultimate Investment Book List
• Follow/Connect with us on social media for daily posts and conversations about business, finance, and investment on LinkedIn, Instagram, Facebook [Kyle’s Profile, Our Business Page], TikTok and TwitterX. 
  

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting cordporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

In this episode, we unpack why wealth alone doesn’t lead to happiness — and how the gap between expectations and reality often holds back even the most financially successful entrepreneurs and business owners. Through practical financial planning and goal setting, we explore how defining your vision of financial freedom is essential for optimizing investment strategies, protecting corporate and personal assets, and aligning your personal finance journey with real fulfillment. From passive income and asset accumulation to managing tax implications, capital gains, and compound interest, this conversation dives into actionable strategies for wealth creation, financial independence, and net worth growth. Whether you’re investing across diverse asset classes or focused on early retirement and the F.I.R.E movement, this episode provides a framework for aligning your investment strategy, time horizon, and cash assets with a life of financial security, purpose, and lasting wealth.

Transcript:

Hey there, Canadian wealth secret seekers. This is another secret sauce episode. And you know, this has been on my mind for a while now. And it came across say my desk or sorry, my listening ears or my reading eyes from Morgan Housel’s book, Same As Ever. And it’s a collection of stories. It’s a collection of insights about what never changes in a changing world. And there’s a part of it. There’s a, you know, there’s a simple,

simple but powerful idea he shares about that we can change how we approach wealth, business, and our lives with this one statement. And it’s really about happiness. And it really hit home for me, and it hit home for how we think about our wealth plans and how we think about where we’re trying to go. And in the quote from the book says, your happiness is the gap between expectations and reality.

And in that book, same as ever, when you think about it, it explains a lot. It’s not just what happens to you that matters. It’s what happens, what matches what you thought would happen. In a world of business, in a world of personal wealth building, a world of entrepreneurship, expectations can quietly make or break your experience and your outlook.

And so today we’re going to dive into why setting clear financial expectations, not just setting goals, is the real step toward building financial freedom. We’ll show you how this idea is tied to some of the work that we’re doing to build the stages for wealth designing financial freedom. 

is tied to a framework we’re going to be sharing, which is about designing your vision and your financial freedom numbers. So if you’ve ever felt like chasing numbers without feeling any closer to freedom, stick around. We’re going to be unpacking that and how to close that gap. And we’re going to be sharing a few stories just to get started here about this idea of your happiness is the gap between expectations and reality. And we were…

Working with client recently, really successful business owner. From the outside, had it all. had it all. His business was thriving. He had a few investment properties, heavily cash flowing. Even a strong stock portfolio that, you know, felt like this was a safety net. By most people’s standards, this person was doing incredibly well. And by his standards, he felt like he was doing well. But in one of our conversations, he said something that really stuck with us. He said, I…

thought I’d feel different by now. And that’s why he reached out to us to talk about say next steps and what he could be doing to fill some of the gaps he was feeling. And when we asked what he meant, he kind of, he paused, said, I don’t know, I just thought that hitting these financial numbers, know, by being here at this time of my life, I would feel different, I could relax. I felt like I would have survived, arrived or survived by now.

but instead it feels like I’m just chasing the next thing and I don’t even know what that next thing is. And this is where it feels like it clicked for him and us, is that he had worked so hard to build financial success. I think we all try to, but he never actually designed the clear expectations for what success was supposed to look like and feel like. Like there’s no defined vision, no target that would tell them you’re here, you made it. And I think a lot of us,

A lot of us have that is that we have this vague idea of like what financial freedom will look like without actually engineering what that should look like and what would be acceptable and what we’d be happy with. So without clear expectations, like even financial wins, like major financial wins can feel super hollow. So without a vision, progress can feel like running on a treadmill. And I think this is where this business owner was.

And it can happen no matter how fast you feel like you’re moving. Now there’s a story in the book that helps kind of make this become a reality or hit home a little bit better. And it helps explain this idea about the gap between expectation and reality and why we need to set those clear expectations and those goals and say those targets to know that we’ve made it to those goals. And it has to deal with like what we think is the golden age

in our societies or our society. I think, and Morgan, how’s the last people you said like, what, what, you know, what decade in our history would you say is like the golden age or the age where like people were prosper prosperous. And most people would say the 1950s. And, I think you say like, that’s the golden age, you look back on it, you’re like, hey, remember, leave it to Bieber or remember, you know, people’s golden age was, you know, we had very prosperous time.

We’ve had a lot of say equivalence across the board and people felt like they had money in their pockets. But when Morgan-Hausel kind of like dug into that idea, actually things weren’t like actually better off financially or economically. They felt better off and that’s the gap between expectation and reality because if you adjust for inflation, the average income today,

was double that what was in the 1950s. And by almost every objective measure, healthcare, technology, education, life expectancy, our world is better today than it was. But most people wouldn’t say today you feel financially better than a person who was in the 1950s. And that’s where that gap between expectation and reality is. Because back in the 1950s, even though you may have made a certain amount of income, but the person next to you, your neighbor,

The neighbor across town within your same town pretty much made the same as you. the distribution between income for the average, for a good number of people was about the same. So when you look at say your neighbor, you’re saying like, well, when I make this, they make that as well. So for example, like the doctor in town didn’t make much more than say the auto worker who is on the assembly line making cars. Like it wasn’t that much more.

compared to what it is now. So everybody, you I had a small house, everyone had a small house. And so, yeah, you know, we went on certain vacations, but everyone took the same types of vacations. There wasn’t this comparison that you can constantly see where everyone else was and it wasn’t where you were, which is I think why, and he explains this in the book, is that why people…

viewed the 50s as say more prosperous is because they felt compared to everyone else just the same. And if everyone else felt pretty good, I felt pretty good. Like I didn’t feel like I was behind the ball or I behind where everyone else could be. And I think that’s a lot different today, right? Like we see a lot of other people’s success today. Social media might be say one of the contributors to that effect is that we constantly see everyone’s

you know, best 20 % and we compare it to our worst 80%. And that’s part of say our financial success as well is that we constantly think we should be better than where we are. And that’s because we see people who are maybe better than when we are. There’s another, like hearing about that, you know, and realizing that our happiness is that gap between expectation and reality. Because if our expectations in reality, that gap is small, we’re happy. But if that gap is large, we feel frustrated or we feel

say that we could be doing better. And that’s why we need to set clear goals. We need to set like, this is the real reality of where I could go based off the current inputs that I have. And we make that clear, then that gap is small. And we feel happy about where we are, not even considering, you know, what else is out there. And I think that’s an important component that we wanna address when we start to set clear expectations. Set clear expectations from what you feel.

or what you can achieve based off a certain level of impetus. We’ll talk about that in just a sec. But there’s another story that reminded me of this. You probably have heard this one before. It’s famous, but it’s like a tourist visits a small village and meets a fisherman who’s sitting by the water fishing, relaxing. Tourist says, you know, if you fished a little longer each day, you could catch more fish. And then you could take those fish to the market and make some more money. And the fisherman’s like, gee, okay, that sounds interesting.

and the visitor or the tourist says, like, with that money, you could buy a big boat. Then you build a processing plant and hire a bunch of people and ship your fish around the world and you’d have a thriving business, which is the dream, know, having a thriving business. And the fisherman says, like, okay, that sounds great. And then the tourist says, then you could buy a really big house.

Those people who work for you could do your work for you. And then, you you could just sit back and relax and now you have a thriving business that works for you instead of you going to fish, which is the dream, right? That’s the dream. And the fisherman says, but so I could do all of that so that I could then sit on the beach and relax. Yes, that’s exactly right. And then I could fish when I feel like it. Exactly. That’s right.

He’s like, but that’s what I do already. You know, and I think this is also this, like, it reminds me of this same theme is that if you don’t define your expectations clearly, you could spend your whole life chasing what you already had or what you already, you know, you’re you already wanted. And I think, or, you know, worse is that you pass the level that you would have made you happy, but you didn’t define it. So you work more than you needed to, to get to that happiness level. And I think that’s.

That’s kind of the big frame. One of the pieces of the framework that we’re trying to build is part of that framework is designing your vision for financial freedom, which is why we need to make that a first step. So no matter where I am on my journey to financial freedom or financial success, I need to know where I need to go, what I need to get to, and what does that look like? So first thing we need to know, like, where are we today? Let’s get real about our financial position. Like, what does my net worth look like?

You know, what does my income look like? What are my expenses look like? Like you’ve heard maybe in past episodes, Kyle and I discuss the, the budgeting, you know, the budgeting debate, like, should we get to the granular and look at every single dollar where it goes, or should we make sure that we’re paying ourselves first and, not worrying about the other things? Like, no matter where you are, you have to get clear about where your financial history, like your financial snapshot is currently. And then you got to think about like your runway, like how far are you? Like what, what would be the reality? What would be your goal, your dream?

to, to, you know, hit your financial numbers or financial freedom. Like is it, I want to work till I’m 65 when I want to work to my 55. Like we have to define like what that working world looks like later in life so that you can reverse engineer the pathway forward. Like maybe, maybe your expectation is that you will sit by the beach, you know, and fish when you want to. Or maybe it is like, I feel like I could work for a long time because I really enjoy the work that I do.

I think we have to we have to get clear on like what that is, we have to write that down. Like, we kind of take it for granted sometimes like, so yeah, I know what I know what I want my life to look like 20 years from now 30 years from now 40 years from now. But we’re going to encourage you to like grab your piece of paper and write it down. And what is it that you’re aiming for? Is it more wealth? Is it is it cash flow? Now later? Is it legacy for your family? Or is it just you know, that financial freedom is like be able to spend time

the way you want, like the fisherman was doing already. So your goals are your expectations. And if you don’t set them clearly, you’re constantly gonna be misjudging your progress. You’ll keep chasing without ever feeling like you’re actually winning. We’re big proponents of the book John Doerr wrote, which is called Measure What Matters. And it guides a lot of our business decisions in say, well, secrets, also business decisions in our math.

consultancy world that we still operate and helping people get clear on those objectives. And in that book, he talks about the OKR process, which is objectives and key results, and that we can’t get to where we’re going unless we measure what matters. And that applies in our financial situations too. Like we need real, measurable, meaningful objectives. And we need to set measurement points along the way to help you judge where you are and if you’re on track.

And that’s why setting those clear goals of where you want to go and then going, okay, where do I have now? And what’s the gap between those two things? And how do I achieve those? Like if I can create and reverse engineer the pathway forward, like is it contributing to this account this much money every time? And if I fast forward my average compounding growth, I’m going to have this much by, you know, 30 years from now and that’s enough.

Maybe it’s just visiting with a financial consultant who can then help you do that because maybe the math is complex for you. No matter what, getting clear there can help you set that in reverse engineer so that you know what your expectations are and what reality actually is. Because I think the best thing you can do is actually get clear on the reality. It’s like, okay, I think I’m gonna have $5 million in 30 years, but am I doing?

Am I using the right inputs and am I contributing to that number so that the math actually works out that I get there? And I think a lot of us just assume that if we just do these good things that eventually I’ll have a bigger pot. And I think that’s the hope and pray method instead of the reverse engineer method. we’re big fans of the reverse engineer method to make sure that we get there by doing the right inputs. so sometimes it’s like when we get

And that’s the next kind of part of that framework is to say like, you’re gonna get clear on your snapshots today. You’re gonna look at your runway. You’re gonna look at what you’re really aiming for. You’re gonna set your objectives, which are those goals. But then you’re going to say like, okay, let’s now create the set of inputs that allow me to get there and then just focus on the inputs. Don’t worry about the outputs. Worry about the inputs. Because if you worry about the inputs, the outputs will occur.

And if you’ve set up your inputs correctly and reverse engineered, then you’re on the track to get there. And that’s a really important move because focusing on inputs can make it real granular enough to be like, all I have to do is do these two things. I think from Atomic Habits, we used to pull a lot from that book and that book talked about, if you wanna run a marathon, your first baby steps, like the Atomic Habits,

the small habits is like, how do I run a marathon? Well, one step at a time, obviously, but the first thing I’m gonna do is I’m gonna reverse engineer that pathway forward. And the first step of that was put my shoes by my bed. So when I wake up, I put my shoes on. If I put my shoes on, I’m more likely to run. And it’s a kind of, that was reverse engineer moments to get you there. If all I have to do is focus on putting my shoes on, which is an input, and then doing the run that day, which is an input, eventually the output will happen. And that’s.

an important lesson I think we’ve learned and say our business clients learn and helping them get real on the expectations of where they’re headed and the reality that they currently live in and where they want to go. So that the happiness can happen, right? The happiness has to happen because we’ve shrunk the gap between the expectation that we want and the reality that we live. And I think that’s an important component. So like,

The business owner who never defined enough, they keep chasing those bigger numbers. And they feel more stressed now than they did probably five years ago. The investor who expected 20 % returns every year, even when they earn strong 8 10 % returns, which is amazing, they feel disappointed at the end of that time because they had those expectations and reality were off. And the bigger problem is when your expectations reality off and you get to the end of a timeline that you thought you would be there, what happens is people scrap their ideas

and then they start over and they say, I’m gonna try something new. And when you start trying something new, you pretty much usually interrupt the compounding effect of any sort of financial growth that you’re on. And that right there has huge effects on say, achieving goals. And if you keep switching focuses and keep changing your processes and you reverse engineer new plans and new plans and new plans, usually, you’re not gonna get to where you need to go.

It’s about compounding and those small atomic habits get compounded over time. So also the family member, know, they said like, I just want to leave a legacy, but they haven’t defined what that really means. They’ve got no estate plan, no clarity. And now their wealth could actually cause family confusion instead of family security when that happens. Then, you know, we need to have that clarity. you know, our call to action here today is to make sure that we

Set, we try to shrink the gap between expectation and reality. And to do that is getting really clear around where you wanna go and what does the pathway look like to get there. Because, and set what are those measurables that you can use to check in along the way to make sure that you are hitting them so that your expectation in versus reality is shrunk as often as you can.

And I think that’s an important component of what you want to do to get started is again, some of that kind of framework to build on is, know, where’s our snapshot today? What’s the runway that I want to work on? What am I really trying to do here? And then what goals, like what actual numbers, measurable, meaningful objectives can I put into place? And what are those measurement points along the way? And then what are the inputs that make it happen? That’s what we do when we make financial decisions. And that’s what we help our clients do.

when we help them shrink the gap between expectation and reality. And that’s a big part of what we’ve been doing lately is making sure that the reality matches our expectations. that is, say, our secret sauce today is to help shrink that gap. And if you would like us to help look at your gap and develop a plan with you, then reach out to us. Head on over to CanadianWellSecrets.com, Porsche Last Discovery.

and we can hop on a call and kind of look at your financial snapshot and see where we could go. CanadianWallSecrets.com forward slash discovery. Take care and we’ll talk to you soon.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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