Last year I attended a workshop developed by George Kinder, founder of the Kinder Institute of Life Planning. I had heard of this workshop for at least a decade and it consistently received rave reviews by my peers. The workshop dovetailed with the Financial Planning Association National Conference which was being held in Boston during the time I was in the area.
So how does financial planning incorporate life planning? First let’s take a step back and review the financial planning process. Clients typically come in to see me with a question or two, such as when should I begin to collect Social Security to maximize my benefit? Is my investment portfolio meeting my objectives? How should I invest an inheritance? Can I afford to retire in X years? I am going through a divorce; how can I best handle my cash flow and my assets?
Before answering questions, we have to know much more about them. We ask individuals to complete a comprehensive questionnaire detailing the names of their family members, assets, liabilities, cash flow, income, insurance coverage and estate plans and the like. They also complete a risk profile questionnaire which asks questions such as how they reacted to the stock market downturn in 2008; whether they are more concerned with maximizing portfolio returns or minimizing losses; and whether they are confident in their ability to make good financial decisions. We also want to learn much about their personal goals; whether they are supporting or plan to support other family members; if didn’t have to work anymore, what would they do; and their current strategy for handling their income and investments.
This is all important information; it is synthesized and a plan is developed, then reviewed and revised with a client. A road map with priorities is available for implementation and we assist with that as necessary.
So what did I learn about life planning at the workshop to enhance the financial planning process? We now take clients through several introspective exercises. We ask questions such as “What would you do if you had all the time and money in the world”?, “How would you live if you knew you only had five to ten years left?” and “What would you most regret if you died tomorrow”? Oh there are more exercises; our goal is to truly get to the essence of what is most important to them in both the short and the long-term. Very often there is an “ah-ha” moment for the client and/or their significant other as they gain a deeper and deeper understanding of what is most important to them . Finally, we need to determine a plan to finance their dreams, you may even say, to help them live their passion.
In the workshop, I went through the life planning process; it is very powerful. It brought out deep seated desires that surprised me. I developed a plan to achieve them. It will take several years but I am on the path to reach beyond my current wonderful life circumstances to truly living my passion.
If this process resonates with you, give me a call or send me an email.