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What's the Biggest Risk to Your Financial Plan? It's probably not what you think! Thumbnail

What's the Biggest Risk to Your Financial Plan? It's probably not what you think!

When it comes to money and finance, you probably think about a lot of risks. The risk that you aren't saving enough. The risk that you won't have enough money to retire. The risk that you don't carry adequate insurance coverage. Those are real risks, without doubt. But are any of them the biggest risk you face? The biggest risk you face might be one that surprises you.

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What is the greatest risk you face?

A few years ago, I attended my first-ever conference for financial planners. That might not sound like the most thrilling event to you, but for me it was a blast! 🎉 I learned a ton and connected with like-minded professionals who were just as passionate as I am about helping others with their finances.

And the conference did cover a lot of valuable ground. We had discussed budgeting, taxes, appropriate investing, using insurance to manage risks, and the importance of having an estate plan.

We had covered so much about clients manage risk. I sorta thought we had it sorted. And then I attended a session led by this guy named George Kinder. And that kinda changed everything.

George began his presentation by asking a seemingly straightforward question. What is the greatest risk our clients face? Is it 1929-sized market crash? Is it our clients not having a thoughtful financial plan in place? Both of those seem like fairly sizable risks. But then he offered a third possibility.

What if the greatest risk is that you never step into your life's dream.

In fact, I still have the slide that George presented. Here it is:

And I realized that was it. That is the greatest risk that any of us humans being face. We all have different dreams of what we want our life to be. Dreams of how we spend our time, what we accomplish and even simply how we show up as a human being.

The greatest risk is that we don't prioritize living the life we dream of leading. The risk of not stepping into that dream of leading a truly meaningful and fulfilling life.

The greatest risk to your financial plan is that it serves a life that you don't actually want to live.

And here's where we can bring it back to the world of financial planning. I love working with numbers and spreadsheets and helping folks get their financial life in order. But the real question is to what end?

What is the point of financial planning anyway?

What difference does having the "perfect" financial plan in place make if you aren't living the life you want to be living?

I believe financial planning exists to help you support the life you feel called to live. Financial planning exists to make your life better. To make your experience of living better. And yes, to help you live into your dream - whatever your dream is.

A financial plan is worthless if it doesn't support you living the life you want. In fact, such a financial plan is worse than worthless - it might be detrimental. A financial plan crafted without adequate consideration can actually demand you lead a life you don't actually want. If a financial plan requires you to work in a way that feels draining or requires you to stop spending money on the things you're most passionate about - that plan sucks!

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Life Planning Guides You to the Right Financial Plan

How do you ensure your financial plan doesn't suck? Before thinking about your finances, you think about what you want your life to look like.

But how do you define what your great life looks like? That's a fairly overwhelming question!

The approach I take to answering this question is Life Planning. And in fact, Life Planning is what George's presentation at that conference was all about. Through his Kinder Institute of Life Planning he has developed a method of Life Planning to help ensure you can define and then step into your dream of a great life. That Life Planning process is something you can work through on your own. And there are many great Registered Life Planners who can help facilitate the process for you. (And yes, of course I'm one of them!)

But first you're probably wondering, what the heck is Life Planning?

In some sense, Life Planning is entirely self-explanatory. Life Planning is simply the process of laying out a plan for your life. And then the financial plan we put together serves to support realization of that life plan.

Every plan has a goal: whatever that plan seeks to create or to accomplish. And in the case of your Life Plan, the goal is to deliver you the experience of living your life of greatest meaning, purpose and value.

That probably sounds great. My life of greatest meaning, purpose and value. Sure, lovely, but that sounds a bit nebulous and buzz-wordy. What are we actually talking about and where does such a life planning process even begin?

Life Planning begins by focusing on feeling and emotion.

Why do we humans do anything? Why do we take any given action?

We do it because of how we think taking that action will make us feel. Or we take an action because of how we believe the outcome of that action will make us feel.

  • Why did I eat half a chocolate cake in one sitting? Because the act of inhaling chocolate cake feels good.
  • Why did I throw the rest of that cake in the trash? Because the outcome of losing a few pounds will feel good.

Life Planning embraces the fact that life is really all about emotional experience. What lifts you up, generates energy and brings you joy? What weighs you down, depletes your energy and dims your light? Life Planning begins by fully exploring all the areas of your life that are important: both things you want more of in your life and concerns or worries that you'd like to address.

We want to build a solid financial plan for you. One that minimizes the greatest risk: that of you noting stepping into your dream of a great life. We need to focus your plan on what gives you the most energy, excitement, passion, vitality, vigor. That needs to be the focal point of both your life plan and your financial plan.

Begin by asking yourself "Anything else?"

I'll dive into the three powerful questions you need to ask yourself to really focus your life plan next week. But to begin, I'd encourage your to contemplate all the things in your life that matter to you. Both those things you wish you had more of and those that you maybe wish you had less of.

Ask yourself first what you want to accomplish in life. What's important to create, or to resolve - or perhaps how do you want to be in this world. Reflect briefly on what aspect of that  element is important to you. After that reflection, imagine that you've devised a plan to perfectly address that conern. You have compete confidence in that plan's effectiveness.  Then ask yourself is there anything else. If that concern were fully addressed, is there anything else you'd like to create, accomplish or resolve?

I'd invite you to explore broadly! Think about every element of your life that calls to you. This is all about your life, so only you know what's important to include. This exploratory phase often includes contemplating professional transitions, extended time off work, volunteering, traveling or living abroad, romantic relationships, uncertainty around having children, spirituality, health and wellbeing, hobbies, among others.

That's a Wrap 🎬

That's it for this week's post! I hope you found it helpful and maybe even inspiring. And please let me know what you think! What made sense, and what points were confusing? What else would you like to hear about? Give me a shout and lemme know!

And if this all feels a bit much to navigate on your own, give me a shout! I work one-on-one with therapists from all over the country. There are a three different ways to work with me, all of which I describe on my services page. One is sure to meet your needs and fit your budget!


Turning Point is a registered investment advisor in the state of California. Please visit turningpointhq.com for important information and additional disclosures. This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes financial, legal or tax advice; a recommendation for purchase or sale of any security; or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Read the full Disclaimer here.

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