Three questions.
1. If you had plenty of money and plenty of time, how would you live your life? Would you change anything?
2. Your doctor tells you that you have only 5 to 10 years to live. What would you do in the time you have remaining?
3. Worse news. Now your doctor tells you that you have a mere one day left to live. What would you do? What dreams did you leave unfulfilled?
These provocative questions—first suggested by George Kinder, a fee-only financial adviser—are intended to get people to think about their long-term goals rather than focusing on what’s for dinner and what’s on TV tonight.
The questions were quoted by Michael F. Kay, CFP, president of Financial Focus in Livingston, N.J., in a recent talk he gave to a bunch of financial professionals about Financial Life Planning. (The phrase, by the way, is trademarked by Carol Anderson, president of Money Quotient, a nonprofit organization.)
Kay was talking about the effort of financial planners to deal not just with the financial needs of their clients, but with the direction and tenor of their entire lives. Kay himself, a CPA by training, calls it giving qualitative guidance, not just quantitative guidance.
Traditional planning has been quantitative, he said. Numbers-oriented. “Financial Life Planning brings in the qualitative side.” Not just how you can retire financially comfortably, but how you can lead a more fulfilling life.
“The planner and client can develop a level of intimacy,” he went on. “I have shared moments of indescribable joy—as well as moments of of tears and deep emotional responses.”
These financial planners help their clients focus on their life’s goals, not just their financial goals. The traditional planner asks: How much money do you need to retire? The Financial Life Planner asks: What are you going to do with your retirement – and with your life? No, the financial planner isn’t becoming a psychiatrist. If a client needs serious help, he or she is referred elsewhere. Kay once turned down a retired physician and his wife as clients because they were at each other’s throats all the time. He told them that they needed a marriage counselor.
Kay gives new clients various questionnaires to fill out, such as one on financial satisfaction. Are you satisfied with your level of financial education? With your level of debt? And so forth. Another questionnaire is on “life transitions.” Are you facing a job change now, or soon? Buying or selling a home? Changing your career?
Kay also asks his own questions, beginning with, what do you want to be doing in 10 years? He explores clients’ “money memories” – what did they learn about money, growing up, that may be influencing their lives now? (In my own case, at dinnertime my sainted grandma always told me, “Eat with bread! Eat with bread!” In other words, don’t fill up on meat or fish. Fill up on something inexpensive. No wonder I’m still so cheap.)
Sometimes the solution to a client’s problem is simple. A lawyer in his 60s had a lot of debt, so he couldn’t retire from his own company. But he hated the long commute to work. Could he work from home a day or two a week? Kay asked. That was the solution. (Well, not entirely. His wife has complained, “When he’s home, I can’t get anything done!”)
1. If you had plenty of money and plenty of time, how would you live your life? Would you change anything?
2. Your doctor tells you that you have only 5 to 10 years to live. What would you do in the time you have remaining?
3. Worse news. Now your doctor tells you that you have a mere one day left to live. What would you do? What dreams did you leave unfulfilled?
These provocative questions—first suggested by George Kinder, a fee-only financial adviser—are intended to get people to think about their long-term goals rather than focusing on what’s for dinner and what’s on TV tonight.
The questions were quoted by Michael F. Kay, CFP, president of Financial Focus in Livingston, N.J., in a recent talk he gave to a bunch of financial professionals about Financial Life Planning. (The phrase, by the way, is trademarked by Carol Anderson, president of Money Quotient, a nonprofit organization.)
Kay was talking about the effort of financial planners to deal not just with the financial needs of their clients, but with the direction and tenor of their entire lives. Kay himself, a CPA by training, calls it giving qualitative guidance, not just quantitative guidance.
Traditional planning has been quantitative, he said. Numbers-oriented. “Financial Life Planning brings in the qualitative side.” Not just how you can retire financially comfortably, but how you can lead a more fulfilling life.
“The planner and client can develop a level of intimacy,” he went on. “I have shared moments of indescribable joy—as well as moments of of tears and deep emotional responses.”
These financial planners help their clients focus on their life’s goals, not just their financial goals. The traditional planner asks: How much money do you need to retire? The Financial Life Planner asks: What are you going to do with your retirement – and with your life? No, the financial planner isn’t becoming a psychiatrist. If a client needs serious help, he or she is referred elsewhere. Kay once turned down a retired physician and his wife as clients because they were at each other’s throats all the time. He told them that they needed a marriage counselor.
Kay gives new clients various questionnaires to fill out, such as one on financial satisfaction. Are you satisfied with your level of financial education? With your level of debt? And so forth. Another questionnaire is on “life transitions.” Are you facing a job change now, or soon? Buying or selling a home? Changing your career?
Kay also asks his own questions, beginning with, what do you want to be doing in 10 years? He explores clients’ “money memories” – what did they learn about money, growing up, that may be influencing their lives now? (In my own case, at dinnertime my sainted grandma always told me, “Eat with bread! Eat with bread!” In other words, don’t fill up on meat or fish. Fill up on something inexpensive. No wonder I’m still so cheap.)
Sometimes the solution to a client’s problem is simple. A lawyer in his 60s had a lot of debt, so he couldn’t retire from his own company. But he hated the long commute to work. Could he work from home a day or two a week? Kay asked. That was the solution. (Well, not entirely. His wife has complained, “When he’s home, I can’t get anything done!”)
