Financial planners often help people how to
manage investment or to save for retirement; but rarely do they provide a
more comprehensive answer to the question: What do I really want to do with my
money? Which could be asking ultimately: What should I do with my money? Taking
in consideration all that a person is and what he or she wants in life, the
“financial life planner” (a relatively new breed of financial planners) can
help find the answers.
This new financial
specialty helps people explore personal values and take a life-centered
approach to financial planning by allocating resources not only for the future
but also for the present-day life goals. This is not an easy task, especially
with small-business owners whose life revolves around their business and have
to luxury of time or even the desire to discover the things that provide
meaning to their life.
Justin Krane, president of Krane financial
solutions in Los Angeles, CA asks such questions in order to find out what
people are really planning for in the present and during their retirement. He
says that “most small-business owners' net worth is invested in their business,
so we need to get them to look at diversifying their assets."
The sort
of questions Krane asks includes the following:
- What kind of activity makes you happy the
most?
- If you were the richest person, what would you
do with your money?
- If you had another five to 10 years to live
and didn't know when you will die, what would you do with your life?
- What is the responsibility you would be
willing to give up?
The answers to these questions help Krane
determine what is important to the client and what their values are.
"Until you know where you want to go, I cannot g help you get there.
Financial life planning is all about how to make your life better with your
money."
Most people work all their lives trying to make
as much money as they could. Yet, they have never thought of when they would
stop “making money” and start “enjoying” their money. Neither have they really
thought what they will do with their money that will bring them the most
satisfaction in relation to what they believe is important in life and to the
values. Financial life planning allows people to properly transition form an
active business life into one in retirement while still holding on to certain
challenges that make life more enjoyable while keeping them active in body,
mind and heart.
Marty Kurtz, founder of The Planning Center in
Moline, conducts group discussions on financial life planning in order to help
people integrate business realities with what the mind and heart see. They talk
about whether they should share profits with employees or whether to purchase a
yacht or re-invest the money into the business. “They're decisions of the mind
and heart, made as a reflection of what we value. Money is not a destination.
It's a vehicle to get to a destination," Kurtz says.
It seems that this way of looking at life and at
investment will catch on among many people as we see more individuals and
organizations reaching out to more people than ever before. Money is no longer
just a tool for gaining personal or family success it used to be seen or valued
in the past. Even in the more traditional institutions, particularly in
socialist governments or in the old-moneyed families, sharing of profits or a
more equitable distribution of the wealth has gradually become an important
investment goal.
Michael Kay, president of Financial Focus in
Livingston, N.J., is aware that every person has a money biography that determines
how they make financial decisions. It is, therefore, essential to “understand
what motivates financial behaviors in order to change them, if needed.”
Kay explains farther, "If I'm working with
someone who grew up during the Depression, they don't spend a dime because the
Depression is in their DNA. Or they spend every dime because once they have
money, they are never going to feel that way again. If you have someone who
can't keep a dollar in their pocket, what are the chances that any financial plan
will work unless they change their behavior?"
People who have had early traumatic experiences
related to money in their lives soon realize how their present attitudes toward
money and investment have been influenced by those experiences. Talking about money in a more relaxed and
objective manner allows people to discover hidden resources in their minds and
hearts that will improve the way they will plan their lives from that point on.
Small-business owners are particularly at home
taking business risks but not outside of work as they find it hard to give up
control over matters. Showing people to understand “what money means to someone
is key to successful financial planning,” Kay explains.
Financial life planning, as we see it developing
in the short time we have come to know it, will provide a more balanced outlook
and a clearer avenue for people wherein they can accept change and realize the
potential for personal growth and for greater satisfaction in life.