I remember it like yesterday – fresh off of high school graduation and spending one last amazing summer with high school friends. No summer school or summer programs this time around. It was the beginning of young adulthood – and more importantly, the start of college.
When it came to selecting classes, I remember sitting there thinking – what do I want to do with my life? What am I interested in? What kind of career paths could be had from majoring in each different subject area? I felt like it was a daunting task to ask of an 18-year old.
One thing I was interested in was learning how to invest money and make good financial decisions. So I chose to major in Business Administration and minored in Economics. I thought that a degree in business would provide me with many career paths to choose from giving me a wide range of options.
I ultimately decided on becoming a financial advisor. I liked the idea of learning how to make your money work for you and I always enjoyed helping others. A strong proponent of education, after college graduation I obtained a master’s degree in financial and tax planning and also my CFP designation, the gold standard credential for financial advisors. My professional growth continued and I was fortunate to gain great experience by working at some of the most well-respected financial institutions in the industry.
The purpose of accumulating more knowledge and experience of course, is to help clients more effectively. Until recently, I thought my personal ambition coupled with the experience I had gained provided me with all the tools to provide my clients with the best advice possible.
It was only until I began training through the Kinder Institute for Financial Life Planning did it finally become clear that there is a better way to help clients. Financial Life Planning is centered around a process to help people explore their dreams and create a vision for their life that truly resonates with their heart’s desires.
Only by creating a vision for your life and removing any mental or emotional obstacles that stand in the way can you have a financial plan that is truly going to serve you best. A big part of this process is examining your relationship with money and how it affects your decisions. How did your family interact with money? Do you have issues with spending too much? Or do you experience guilt when you spend money? Thinking back, what were some childhood memories around money – good or bad? Do these beliefs and behaviours still affect your decisions today?
Your relationship with money will impact most of the decisions and relationships in your life, so it makes the most sense to start there. Only then can you truly make the proper financial decisions to help get you where you want to go. To help understand what’s most important in your life, the process begins with three deeply reflective questions.
Imagine you are financially secure, that you have enough money to take care of your needs, now and in the future. How would you live your life? Would you change anything? Let yourself go. Don’t hold back on your dreams. Describe a life that is complete and richly yours.
The first question is designed to allow you to explore your dreams and what your ideal life would look like. There really aren’t any parameters framed in this question so answers are usually wide-ranging. They can range from things like hobbies and traveling to repairing relationships with family/friends or pursuing suppressed passions and interests you may have once had. What a great opportunity to flush out everything that is important to you and reflect on the things in your life that you still have interest in experiencing. Casting a wide net is indeed the primary goal with the first question.
Now imagine that you visit your doctor, who tells you that you have only 5-10 years to live. You won’t ever feel sick, but you will have no notice of the moment of your death. What will you do in the time you have remaining? Will you change your life and how will you do it? (Note that this question does not assume unlimited funds).
You should have compiled a fairly thorough list of things that are important to you from answering the first question. However, the primary difference now is that you have a shortened timeframe – how short, you don’t necessarily know, which makes this question more challenging. Typically, the result is starting to prioritize the things on your list from the first question. Some of things on your list may not be able to be accomplished in such a short timeframe – how does that make you feel? What’s preventing you from taking action to fulfill some of the goals that are most important to you?
Finally, imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What did you miss? Who did you not get to be? What did you not get to do?
This question will begin to highlight the most important things to you in your life and can be a wake-up call for so many people. We get so caught up in our daily routines and behaviors that sometimes mask the things in our lives that are really important to us. This question allows us to strip away the things that we identify with the most such as our professions or material possessions. This final question usually prompts answers around 4 common themes: Family or relationships, authenticity or spirituality, creativity, and giving back.
What does this have to do with retirement?
In short, the answer is that it has everything to do with retirement. When you clarify how you want to live your life, you can make financial choices that best reflect your values. The entire purpose of the life planning process is to remove the participant from their everyday life and ask themselves who they really are as a person. Your occupation is a vehicle to generate income. Income is the means to accumulate wealth. The true question is, what for? Without a thoroughly defined outcome, it’s impossible to make financial decisions that allocate your wealth in the most meaningful ways.
Danny G. Michael is the founder and CEO of Satori Wealth Management, Inc. He has 20 years of experience in retirement planning working with individuals, families, and business owners.