|Written by John D. Buerger, CFP®|
|Monday, 25 January 2010 18:31|
Last week, I suggested that "what I do" and "what you think I do" are substantially different from each other. It was one of the most popular posts I've made. Read it here: "What We Really Do."
This week we're going to take the topic to the next level - raising the bar for the profession and what that means for you.
It's a very powerful feeling to "be in control over your money" - a feeling which (sadly) a vast majority of Americans will never have (read on to stay out of that majority). An important but rarely discussed challenge within the financial planning process is one of alignment - keeping both today (the here and now) and your future (security) in balance.
Real financial planning shouldn't involve product sales, has very little to do with investments and nothing to do with what pays the advisor the most amount of money or earns him/her a free trip or other incentive.
REAL financial planning has EVERYTHING to do with helping you understand the unique set of financial tools you have at your disposal and how best to use those tools to enjoy more of what is important to YOU.
It does involve becoming acutely aware of your current situation - what tools you do have, how they work (and don't work), understanding your personal strengths and weaknesses and then designing a strategy to make the most out of what you have to get the most of what you want in life.
That's the key, by the way - "getting the most of what you want in life," not just achieving your goals - and we'll get to that in a moment.
The process IS pretty complicated - there is no room for boilerplates in this business, not if you're doing it right. Each of us has a different tool set based on our employment, values, relationships and personal strengths & weaknesses, and each of us has different objectives, passions, mission and vision for our lives.
No two humans are exactly alike - no two financial strategies should be alike either.
This complexity is a big challenge many people have with the financial planning process. It seems overwhelming to most folks - too complex ... "I'll worry about it later," they'll say to themselves.
Is it all worthwhile?
Here is the place where good financial planning is really misunderstood. The common perspective is that financial planning is some kind of painful, sacrificial, tortuous process that sucks away all the fun in life. It may leave you with more money but the price you will pay for that is even less happiness - and how worthwile is that?
Financial planning is looked at as some kind of really disgusting medicine - you know, the kind that made you gag when you took it as a kid. Not only was it nearly impossible to swallow (or worse yet a painful shot in the arm), you were sick so you couldn't go outside and play or be with your friends or anything else you wanted to do.
You also have to PAY for financial planning services (and the adage "you get what you pay for" is especially true in this business). That just adds insult to illness. Why would anybody want to pay for someone to tell them (a) they're financially sick, (b) they have to stay home and not have any fun, (c) they must take some horrible medicine or they'll never get better.
The natural tendency is to go into DENIAL mode and give up. And that is exactly what more than 80% of Americans do. They never bother to see a professional.
I'm not saying this is what really happens in a good financial planner / client relationship. It's not. But this is what most people THINK happens and that's what keeps them from exploring the possibilities in the first place.
There is a second challenge facing your success with a financial plan and that is a general focus by most financial types (even real financial planners) on products and results rather than process, balance and alignment with your values.
We are a very goal oriented society, especially in America. At work there are sales goals, income goals, production goals, productivity goals, etc. At home we emphasise getting good grades, having a bigger house, a newer car or more toys (boats, bikes, etc.) in the driveway.
When you first sit down with most people in financial services, you are asked about your assets and wealth ("Where You Are Today") and your goals for the future ("Where You Want to Be").
The first question is so the "advisor" (and I use that term loosely here) can figure out how they're going to get paid. Even though knowing "Where You Are Today" is important (it's the first part of any successful strategy), most "advisors" are more interested in how this information applies to them, not you. The second question is also critical for you to know, but the "advisor" only wants the answer to pinpoint your motivations - you'll tell them how they can sell you their product or service.
Sales motivations aside, are all these goals and objectives good for us?
Are we losing sight of living life today?
Life is a continuum.
I know this flies in the face of Kurt Vonnegut's hypothesis that "life is a series of unconnected moments put together in a perfectly random order." From my perspective and from everything I've read in history, life is a continuous line with ebbs and flows, ups and downs. Each moment is connected to the one before it and the one that follows.
When you die, there will likely be a tombstone made for you. In that stone will be carved your name ... and two dates: the day you were born and the day you died.
Between those two dates is a dash. That dash is your life.
Now a dash isn't a particularly expressive or detailed depiction of a person's life - after all, most dashes are pretty much the same. But YOU are different from every other person. You are unique.
Shouldn't your dash be different?
For whatever reasons, though - the one reference to your life that lasts longer than most any other reference (tombstones last for centuries) is this dash between two dates.
"LIVING THE DASH"
Life also has the potential to be cut short at any given moment - just ask anybody who has lost a loved one to cancer or an accident.
How you live your dash is important.
Then again, living life totally for the moment (the here and now) doesn't work either. It is that attitude (buy it today, worry about it later) that has put this country in hock well past our eyeballs and could very destroy our society and our children.
There has to be some kind of balance.
With every decision you make (especially financial ones), you are choosing to do something for the here and now ... something for your future ... or something with no purpose at all.
Those are your three choices - Now, Later or Never!
What we have learned is that when there is a balance between the first two (Now & Later) and a relatively small amount of the last one (Never), life is full and rich. Too much "Now" focus will always catch up with you and destroy you. One of my major concerns with new clients is to get them thinking about life beyond the moment: How will you afford college education? ... retirement? ... a major illness? ... or the next economic crisis?
Then again, if you save everything for the future and only aim at goals that are far away, you miss out on life. If your life is cut short, your dash ends up being pretty non-descript.
We have also found that when you operate your life in alignment with your values - those things in life that are truly most important to you - you naturally enjoy a good balance of "Now" and "Later" and very little "Never." You will be satisfying deep passions within you more than flirting with shallow and temporary chemical additictions in your brain.
You will be pleasantly surprised when you realize how powerful, positive and exciting it is to go through this kind of process - not at all like the "painful, sacrificial, tortuous process that sucks away all the fun in life" perception most people have about putting together a financial plan.
QUICK EXAMPLE - Think about a time in your life when you realized a dream (any dream, it doesn't have to be a real big one) - maybe it was the chance to share a precious moment with a loved one or see a new place you'd never been to.
Think how good it felt to make the decisions leading up to that wonderful result.
Financial planning - when done correctly - gives you the power to make those kind of wonderful, fulfilling and excitingly good choices every day with every dollar that flows through your fingers, balancing the joy of today with the security of your future and all the while enjoying more of what is really important to you.
That's the difference between "letting life hit you in the face" and "having control over your money" ...
... and it's a huge difference.
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|Last Updated on Tuesday, 26 January 2010 18:06|