I come from nearly 20 years in the Financial Planning industry where ‘in a nutshell’ we help people achieve financial goals through the better utilisation of existing financial resources.
There’s always been a couple of things I didn’t like about this. I think most financial planners are genuinely trying to help their clients improve the quality of their lives but I’ve always felt that the starting premise was flawed for a couple of reasons.
Flaw number 1 is in what seems to be the prioritisation of financial earnings, emphasis on ‘earnings’. There’s a big focus on ensuring the different ways you can earn money and how you go about it are all appropriately recommended. Due to a painfully heavy compliance burden this is often painstakingly spelled out for clients, independent of their interest levels, while crossing t’s and dotting i’s and being sure to note that you did both and then often just noting that you noted it for good measure. If a colleague is with you and they note it too, that’s a compliance plus. Extra gruel for you.
Now don’t get me wrong, because financial ‘expenditure’, where I feel the greater prioritisation should exist over ‘earnings’, is actually addressed to some extent. Full cash-flow breakdowns and budgets acquired if not summarised into a client dictated cash-flow surplus that we can gauge against savings and investment history to determine accuracy. It’s covered. However once known it’s usually history. It’s the piece of the puzzle we need to be able to move to the seemingly more important ‘now based on this, how much can we earn’.
Speaking only from my own experience, it seems that very few financial planning businesses have a ‘cash-flow’ offering anywhere nearly as detailed and comprehensive as their investments/earnings offerings or services. So far I’d say most don’t cover it at all beyond the fact-find, and the few that are offering some kind of ‘budget coaching’ perhaps, outsource it or offer it as a small side-product to their bigger brother offerings in investments/risk management etc.
I believe financial expenditure says much more about where somebody currently is and where they’re going than financial earnings, for one precise reason: discretion.
When comparing the two, most people are only really earning money in 1 way, or only have a handful of options when it comes to different ways they can earn money. Expenditure however, particularly for anybody in our world-class best-of-all-times first world society, has such a plethora of options. All day every day, most of us are bombarded with advertisements, usually thanks to big brother listening in with open arms just waiting to hear the magic words before dumping uniquely-you-based ads in your search engine results or social media wall. We’re truly drowning in ads on a daily basis and such evidences the ways we all spend our money, are truly limitless, in comparison to the ways we earn it.
Discretion. There’s so much more personal-choice involved that there’s that much more opportunity for those choices to demonstrate the individual’s interests, values and priorities. Where there’s no choice involved ‘who you are’ is obviously much less clear. This is also why I believe measuring and tracking what people determine to be their available resources aka ‘surplus‘, is arguably much more important than tracking the expenditure of ‘all resources’. Deeming it ‘available’ means we truly believe it’s use is comparatively ‘responsibility-free’, not really owed to any specific cause and therefore can be freely spent however we see fit with no real cost to other obligations. Without going into too much detail I give it as my opinion that the dangerously horrific increasing statistics in mental health, depression and suicide, particularly amongst first world citizens can be largely attributed to this. Never before in history have we had so much surplus. So much of our resources considered ‘available’ for free use, and therefore so much the greater opportunity to unknowingly gratify ourselves to death, or edify ourselves (once we understand how) into a more flourishing life.
This brings me to Flaw number 2. Financial planning is usually using money to achieve money-goals. It’s the nature of the beast. However out of all the resources we have, I believe how we spend our time, relationships and opportunities are all things that say way more about us than how we spend our money. Particularly time, which I’m still debating if it’s the most important resource to measure (in comparison to relationships), seems to me to be so much more valuable than money. This is particularly evident with loved ones, when spending a few simple hours with them at home or nearby, can often feel much more meaningful than spending thousands of dollars going on an exciting but stress-filled holiday. Most of us aren’t Keanu Reeves. We’re not immortal and we only have so much time to give. Spending it on people therefore, is one of the best ways we can truly be excellent to each-other.
For these reasons I feel countless decent financial planners are trying to improve the quality of their clients lives with their hands tied behind their back. Prioritising earnings over expenditure, or money over more important resources, is always going to dramatically limit the potential value that your clients, your people, can truly experience.
Edifying your hunger for success is about providing ‘edifying experiences’. Experiences that help people move away from both gratifying their hungers and even simply satisfying them, which doesn’t really help either. Edify or die, essentially. Pun intended, because that’s what’s happening.
I’m looking for people who are willing to free-trial my first edifying experience: “3D Lifespan” and provide thorough feedback to help ensure it’s as valuable as possible to you and others. If you can spare an hour or so to help, please book a time with me that suits you via the ‘book-now’ button, because I genuinely would love and greatly appreciate spending the time with you.
Until then, party on dudes.