The Role Of A Financial Plan
The role of a financial plan in the Pursuit of your authentic life is to direct the allocation of your resources.
Some fundamentals in your financial plan are less about your authentic life and more about protecting your loved ones and others who might rely on you for financial support and ensuring you have your basic living needs like shelter, food, and transportation covered.
Life insurance, disability insurance, and estate planning documents like a will, power of attorney, healthcare power of attorney, and a living will protect your loved ones against an early end to your experience, a loss of ability to earn income, and to not have to make an emotional end of life decisions.
Reviewing your cash flow and expenses, establishing a minimum viable budget, and being honest about where you are currently spending your discretionary will help you identify the resources you can align with your values.
Once you move past these insurances, estate planning documents, and basic cash flow analysis your plan becomes about your authentic life.
Traditional financial planning would lead you to believe saving for retirement, college educations, and home purchases are the North Stars for a financial plan—these are important milestones and goals within a financial plan, but they alone do not lead to a fulfilled and purposeful life.
The first step in creating your financial plan is not to calculate how much money you need for retirement. It’s not to determine how much you need to save for your children’s college education. It’s not to compare strategies for purchasing a new home or car.
The first step in creating your financial plan is to figure out what YOU really want out of your life. Not what your parents wanted for you. Not what your teachers wanted for you. And for damn sure, not what society tells you your supposed to want.
The first step is identifying your values, understanding what money means to you, and most importantly, what your authentic life looks like.
Then, and only then, should you start looking at savings, investments, account types, and planning strategies. Your authentic life will determine the right savings rates, where you should save, the right allocation, and what tax planning strategies you should use—your plan will be unique to your vision.
A financial plan is an integral part of your Pursuit. In order to live your authentic life you’ll need to have a plan for how to allocate resources today, prepare for future goals, and have a living document to help you adapt to the changes your authentic life will bring. Yes, your financial plan will have projections, graphs, and charts—but those are not your plan. Those visuals help you see at that moment if you are allocating your money in alignment with your authentic life. Your plan is the conversations with your advisor (or yourself if you are a DIY’er) and the intentional decisions you make with your resources.
The role of your financial plan, and your financial advisor, is simple, yet complex and important–its purpose is to align your financial life with your authentic life.
Note: I believe so strongly this is the way financial planning should be approached that I have restructured RLS Wealth for future clients and will only work with individuals and families ready for the Pursuit of their authentic life—if you are curious about what planning for you authentic life looks like, take a quick look at the LifeDesign+ relationship I’ve created.
See you tomorrow and keep pursuing,
JC
