I was recently asked, “what’s the definitive answer to the question you’re asked the most?”
Wow. A flurry of boring finance darted across my brain…what do I hear the most? I came up with:
“Am I going to make it?”
The Wall Street mega media machine is contrived to grab attention, not help you. It’s sexy – hot stocks, vanity plates, invite-only guest lists (do you even own Bitcoin, bro!?)
That stuff’s fun, some of it even IS sexy!
But strip out the pomp, the luster of excess, and get real humans with real emotions to sit down and drop the cuff links at the door? They just want to know if they’re going to make it.
A couple with a third child on the way, wondering how they’ll fit in their tiny two bedroom. A rising executive, laid off from the dream position they fought so hard to secure. Parents with a special needs child requiring extensive, specialized care. A single mom, balancing a career while trying to give her kids the best education possible. A guy suddenly stricken with illness, no longer able to work to his income potential.
Or someone just wondering if they’ll have enough money to retire before their work clock runs out.
Vanguard and many others have attempted to quantify the value of an advisor, and we do that stuff too. But how do you quantify helping someone navigate a tricky spot in life?
Financial planning isn’t well defined and difficult to articulate because life is messy. Ask an advisor that’s been in the business long enough, they’ve seen it. All of it. The triumphs, the tragedies, the tedium. Money in an account is easy to tally; How it tugs at your emotions is much less so.
What’s my definitive answer? “it depends”
In the last month I’ve helped clients with mortgage options, an international move, reviewed multiple insurance policies, whether to buy or sell a house, discussed potential job changes,…Such a simple question, yet it means something so different for everyone.
So what’s the process? I’ve written before about handling real risk first. Those are the really scary, ugly surprises that life doesn’t allow all of us to duck. You handle that first, and quickly. Next, I try to get clients focused on their answer, not the ‘right’ one. By focusing on their values as the core of their finances, they’re more likely to commit to (maybe even enjoy?) a long-term savings plan.
Finally, we can put real numbers on paper to address…real life. A few calculations can demonstrate their saving and investing can pay off, and has a purpose. The risks and blind spots are covered, the base of the pyramid is built. If you squint, ‘am I going to make it’ now comes into view.