What is financial planning about?
This is a common question I get asked. After all, isn’t financial planning just something we do as a part of our lives?
Why should you hire a financial planner to help you? Why can’t you just implement all of this financial advice on your own? Intellectually speaking, there’s no question. There are many fantastic do-it-yourself (DIY) folks out there who do a great job at staying on top of their financial picture and following through on their goals. For readers like that, I hope my information can be a help to you!
Many people, though, find themselves lacking some of the specific knowledge, time, discipline, or emotional bandwidth to accomplish all this. That’s where Wise Stewardship can come alongside as a trusted third party to help you look more dispassionately and rationally at your situation. I can help hold you accountable to your goals and decisions, especially with the emotional challenges that sometimes come with money.
What is this “goal” thing really about?
Another thing is that a financial planner asking you what your “goals are” can be kind of an unsettling thing. In fact, for many people they might never have been asked that type of question before.
What if you have no idea? Maybe you thought you knew once, but your life keeps changing?
Most people who come to talk with me come with a financial challenge or question they’re unsure about.
Even if you have a pretty good idea about what you might want some goals to be, what happens when life changes and evolves? The future is uncertain. The markets are uncertain. There will always be unknowns. As we like to say in the military, no plan survives first contact with the enemy because they get a vote too.
My story is a good example. I thought I was going to stay in the Air Force for a long career and all indications indicated I was well on track. Then life happened when my late wife Sarah got sick and everything changed. Now I am an entrepreneur, living in a different part of the country, married to my wife Anna, along with so many other changes along the way. Few, if any, of my original financial goals survived intact. All of which begs the question, why bother with planning for financial goals anyway?
Process versus “Planning”
One of my favorite thinkers and writers in the financial planning world is Carl Richards. You may have heard of him from his Sketch Guy Column in the New York Times for many years or his two books, The Behavior Gap and The One-Page Financial Plan — both of which I highly recommend by the way!
Carl put it this way, “Financial planning is just about being committed to the process of guessing and reevaluating the guesses over time as your life changes and circumstances evolve. Don’t be committed to the guess, just be committed to the process of guessing.”
That’s what true financial planning is really about. It’s setting the framework to think about and reevaluate your present financial situation and where you want to be in the future. Think about the old adage about the difference between the journey and the destination.
Sadly, even in financial services, too much of the old-school financial advisor model was about their ability to just pick the investments or outperform the market, let alone do a comprehensive financial plan. IF they did a plan at all, it was often only a chance to pitch you a product to buy and earn them a commission.
For those that did give advice, it was usually about how much money you already had so they could manage it (usually called Assets Under Management – AUM). This left the vast majority of Americans without access to true, fee-only, fiduciary financial advice.
That’s why I wanted to do things differently. Instead of my firm just asking about how much money you already have (in order to manage those assets – AUM), I want to get to something deeper.
A Different Way of Financial Planning
One of my financial planner friends came up with a different way to think about that AUM acronym.
Align your money with your life meaning
Understand your unique money story (past, present, future)
Monitor life’s evolutions and transitions to adapt as things change
This approach also differs from the old way of strictly focusing on investment performance. Instead of a sole focus on return on your investment (ROI), it’s better to think about return on your life (ROL). Your life and your hopes and dreams reflect that unique and highly personal approach. I believes your money should as well.
I help you bring clarity to your relationship with money and the purpose of it. After all, what is the ultimate goal of building wealth, having money? Only you can answer that question for yourself, but it can be challenging doing it on your own. Your past money story and experiences can cloud your ability to look into the future. We all have these cognitive biases, which is why we do things like buy things to make us feel better, don’t save or invest as much as we should, or otherwise let money negatively impact relationships with family and friends.
My clients are often surprised at how much time we spend at the beginning of a planning relationship delving into the “squishy” topics about money. But in my experience, they are foundational. A meaningless pursuit of wealth traps people on the hamster wheel of “keeping up with the Joneses” and doesn’t lay out the roadmap, much less the destination. We work together to align your spending, savings, investments — every aspect of your financial life — with your values.
This part is hard work, but my clients inevitably tell me this was the most impactful and meaningful part of the entire relationship of working together. After all, money is nothing but a tool. It can be used for good or bad. Most of the challenges I see relate to people not understanding the mismatch between their values and what they actually spend or save for.
Personalizing the Process
What makes Wise Stewardship unique in this process? Why not just go hire a big company to answer your questions?
As a boutique financial planning firm, I am able to develop deep and lasting relationships with my clients, helping them achieve their goals and dreams over time. I personalize this process to your unique and individual needs. I would like to help you navigate the financial planning seas so that you can live the life you want, and I serve those who are surviving busy lives and help them learn to financially thrive. Your financial plan may be unique, and it may not look like anybody else’s, but it’s yours.
Financial planning is about relationships because a financial plan is not a one-time event. It’s an ongoing process.
You’re busy, your life is hectic, and there is a lot going on week to week and month to month. That’s exactly why periodic meetings with your financial planner throughout the year makes a difference. There’s no way to capture everything that happened in your life in the last 12 months and present it to an advisor at your annual meeting — let alone have the advisor truly understand your thoughts about it.
Financial planning should be proactive, but a single annual meeting leaves you no choice but to constantly react to what has already happened over the last year. Think about your business or career goals. How do you think you’d perform if you set your benchmarks for the year on January 1, but didn’t revisit them, or your progress toward them, until December 31?
Financial planning is also an opportunity to invest in your life and gives you a process for using your money wisely to get what you actually want now and in the future. Just like a personal trainer designs the proper program for your specific fitness needs and holds you accountable to staying focused on your goals, I do the same with your money. I want to empower you to make smarter, more informed decisions that align with your values that can produce dramatic results in the future.
Some of that value is more intangible than a list of deliverables. The smart financial decisions you make today (and the not-so-smart decisions you avoid) create a compound effect over the long-term: the more you do correctly today, the greater your level of success is likely to be in the future. The small adjustments I can show you how to make today, and my advice to help you optimize your financial life, can add hundreds of thousands of dollars to your net worth over your lifetime.
Interested to learn more? I am passionate about helping my clients and fully transparent about my business. I explain more about the how and why of founding this firm and working one-on-one with clients. I also invite you to schedule a free, no obligation consultation with me to learn more.