A seismic shift is occurring in the world of financial planning. Traditional financial planning has tended to treat “money”–not people–as the client. Armed with calculators, spreadsheets and sophisticated software, financial planners have historically offered products and services focused on accumulating, husbanding, and then passing on monetary wealth.
Many people, however, have concluded that life means more to them than bank balances and spreadsheet projections. They are ready for a new way of looking at their money and their futures, one that provides a purpose driven financial solution for truly rich and fulfilling living, whatever their age. This new approach is called Financial Life Planning.
Why should you create a plan for your life?
1. Because there is power in planning. When plans are carefully thought through and written out, they tend to come true, whatever the obstacles.
2. Because a life plan can serve as a guide, helping you align your deepest values, beliefs and goals with your earning power and financial resources so you can realize your dreams.
3. Because by combining proven investment strategies and an honest, heartfelt life planning process, you are quite likely to get where you want to go.
Think about it. It’s silly to slave-away at your job, save and invest your hard-earned money only to retire and say, “Now what?” What if you could work with an adviser that put you– not your money–at the centre of the equation? Imagine an adviser who first made sure they understood your deepest aspirations so all your earning power and assets could be harnessed to help you achieve your unique vision of financial and personal freedom, both now and later in life.
That’s Life Planning.
How does Life Planning work?
Life Planning is the process of melding money with meaning. It allows people to live richer, fuller lives – personally, professionally, financially and spiritually. For the plan to really take hold and move forward with velocity, the skills of a trained Life Planner are almost always needed.
The Life Planning process I teach to advisers (called “EVOKE®”) is based on my years of experience as financial planner.
EVOKE is a simple yet profound 5-step process involving a series of conversations and exercises that enable you and your adviser to collaborate in the creation of a vibrant and complete plan for your future.
Each of the letters of E-V-O-K-E stands for one of these 5 stages:
Exploration: A thought-provoking set of goal exercises are the starting point of the process. They include the famous “3 Questions” exercise that helps people think both broadly and deeply about what matters most to them in life.
Vision: The skilled Life Planner takes this material and challenges the client to sweep away doubts and craft their ideal life in as much detail as possible. The rush of vigor and vitality surrounding this phase literally “lights the torch”, energizing clients to achieve their vision in the shortest time possible. Goals are no longer something to be hoped for “some day” but immediate and vibrant–something to be worked on NOW!
Obstacles: “Money excuses” can be deadly, so it is critical for the client and the life planner to identify these and other potential roadblocks. The life planner provides vitally important support to keep the client on track for success through this often difficult phase. Surprisingly, some of the most stubborn constraints to getting the life we really want are internal beliefs. By working with a thoughtful professional who can validate the client’s vision, these preconceptions can be dissolved.
Knowledge and Execution: Once the ideal life vision has been created and obstacles defeated, traditional financial planning skills of asset allocation, risk management and product selection are incorporated to complete the design and implementation of the life plan. The unique ability of Financial Life Planners is their ability to develop relevant financial plans that directly support life goals—a marriage of the creative and the practical. Financial Life Planning process is by far the most powerful and comprehensive way to do financial planning, as it focuses on your truest and most meaningful goals from the outset and clears away the money excuses that cause so many well-intentioned traditional financial plans to fail. The results are extraordinary. In case after case I’ve seen people turn unsatisfying, mediocre lives in astonishing new directions, following pursuits full of passion and significance. This is truly “financial planning done right!”
George D. Kinder, CFP®, RLP®, was a practicing financial planner and tax adviser for over 30 years and is internationally recognized as the father of the financial Life Planning movement. He is Founder and President of the Kinder Institute of Life Planning. You can find a Registered Life Planner® at www.KinderInstitute.com. Kinder is the author of two seminal works on Life Planning: The Seven Stages of Money Maturity: Understanding the Spirit and Value of Money in Your Life (Delacourt, 1999) and Lighting the Torch: the Kinder Method of Life Planning (FPA Press, 2006).