Updated: May 8, 2020
Since I launched my financial planning business last year, a particular style of connecting with clients has caught my eye. Can you imagine working with a financial planner not just on topics like budgeting, investments, or insurance, but on a plan for a passion-filled and well-lived life? Is a relationship of that depth realistic with someone who traditionally sold you products you didn't need, or someone you never heard from?
As time marches on, I hope that the days of your "finance guy" calling you and selling you more insurance or a hot stock tip will be a thing of the past. I hope that the financial planning industry will be exclusively operating in accordance with the fiduciary standard, where we as a group are required to operate in our clients' best interest. Surprise to anyone? That's not required right now. But I digress...
The traditional model of the American Dream is built like this: I try my hardest in school, I get a good job, build a career, and hopefully have enough money when I retire to do fun things like travel and see my grandkids.
Here's the problem with that model - it limits the amount of time you have in life to do the things you love. It potentially forces you into a job or career that leaves you wanting, or fills you with stress. Stress causes health issues as we know, so you are potentially saving for a time period in your life when you want to do all the fun things, but don't have a healthy enough body and mind to do them.
Enter Life Planning, a financial planning process that digs into your passions and goals right now, in addition to the traditional ones like:
1) Building an emergency fund
2) Saving for college for my kids
3) Having enough money to retire
There are several proponents of this idea and goal for the future of our industry, like George Kinder of the Kinder Institute of Life Planning. The Kinder method includes asking open-ended questions that go much deeper than "what are your goals?". One of the questions asks if you had all the money you thought you needed for retirement today (or enough money that you no longer needed to work), what would you do with your time? Take a minute, think about the question....
It doesn't matter if you are 25 or 65, we have all thought about what life might look like as we near retirement, or no longer have to subscribe to the traditional 9-5. Would you spend more time with family, would you travel 6 months out of the year? Would you read as many books as you could, or spend most of your time in your garden? Would you go to cooking school, start a new hobby, or even start a new business? Do you have a dream you've been too afraid to share, because it might jeopardize the lifestyle you are living now? Would your dream shock your family, so you keep it to yourself?
Life Planning takes the answers to these questions and asks, why not now? Financial Planners know how to look at your life's savings and other resources and tell you how to build them the old fashioned way, but shouldn't they also be able to help you achieve more joy in your life before you turn 65?
Working with someone who practices Life Planning goes significantly deeper than this first question, but it's a good place to start. If financial planners can help you live a life you love now, rather than waiting for that life in the future, maybe you would be more excited for meetings. Maybe you would pay attention to your finances, and not be afraid of them. Maybe you could be more inspired to pay off your debt, be consistent in your savings, trust in the process. Maybe "Life Planning" sounds a little woo-woo to you, and you're laughing at the whole idea. There are definitely still clients I work with who give me the "what on earth are you talking about" look.
We all have dreams though, and our dreams don't wait until we retire to pop up, do they?