Tuesday, March 10, 2015

Personalized Financial Life Planning (1) vs Personal Financial Planning

Personalized Financial Life Planning (1) vs Personal Financial Planning

            Personal Financial Planning is a misnomer.
            First, the ‘personal’ is at best 5% ‘personal’ (mostly at the sale of the engagement) and 95% financial (as for the ‘planning’ that’s questionable). Thus, at best, so called personal financial planning, in practice, is merely financial resource planning applied to personally held assets, and at worst, this planning process is conducted by a planner who hasn’t ‘planned’ for him or herself let alone his or her practice (the cobbler’s child goes without shoes).
In effect, personal financial planning is an oxymoron, and usually is a masquerade delivery system for the sale of product or securing assets under management. As such, this so called personal financial planning is not personalized practiced– analogous to architecture ‘outside in’ rather than being interior designed ‘inside out.’

            Reinforcing this ‘outside in’ exterior focus ‘personal’ financial planning is the acculturated and or hard wired paradigm of More’ as in the Ken-L Ration dog food commercial of yesteryear “my dog’s bigger than your dog.”

             In contrast, ‘Personalized Financial Life Planning’ is an inside out interior design task judged relative to one’s specific goals and values not the Dow Jones or other external indices. This inside out planning aligns personal resources (and not just financial) with life values and goals towards one’s significance and if spiritually inclined towards one’s perceived assignment.

            The 5% (or less) of time devoted to 1) honing, prioritizing, making tradeoffs with clients relative to their goals (if at all), 2) taking a risk tolerance scale (typically out of sequence before baselines are established relative to where the client is if he or she does nothing), 3)let’s be friends yakety yak – personal financial planning or faux personal financial life planning process is, in my opinion, is a mischaracterization of personal financial planning, at best, a fraud on the client, at worst. The aforementioned ‘process’ is a adulteration of the ideals of personal financial planning typically failing to align values, goals and significance just leading to disappointment and failed expectations (on both planner and client’s part!)

Where there is no bread; there is no Torah
Where there is no Torah; there is no bread
Talmudic thought

And where there is no alignment of values and mission, there is no satisfaction for client or planner only ‘if onlys, we should haves, we shouldn’t have’ and other anxieties real, imagined and or invented.
            And contrary to Hillary’s Clinton’s statement, “what difference does it make?” what damn well matters is progress towards or maintenance of the goals aligned with the client’s values & mission. When there is no alignment, the rear end eventually goes out – with the backend and or tushie scraping the ground with client blaming the planner (and rightfully so- though qualified by the fact there is no parasite without host – regardless of the obligation of substitute reliance).
            In contrast, to ‘personal’ financial planning’s outside process orientation akin to architects providing ‘blue prints’ of the exterior, personalized financial life planning is an inside out process incorporating ‘interior’ design. The compensation methods of either assets under management or transaction (sales) based compensation is inconsistent with personalize financial life planning as 1) managing assets becomes the focus rather than managing goals and therefore 2) more (be absolutely and relatively) becomes the metric rather than attaining the goals with the least risk possible regardless of external indices (Dow Jones etc) as a) ‘why sacrifice what one needs for what one doesn’t need and b) more, better, now has a habit of becoming less, worse, later.
            Also in contrast, to the ‘more’ & more-on orientation of personal financial planning, the personalized financial life planning emphasis is on ENOUGH – enough to live on; enough to live for – healing personal financial anxiety, puttin’ money in its place to align with one’s signification and assignment.

            Yes, there is still that primary underlying fear client’s have of ‘outliving one’s money’ (making them dependent) that reinforces:

  • more, more, more so I’ll have enough,
  • the cushion ‘just in case’

Given the above, the consequential hamster wheel of ‘more, more, more’ is understandable (though futile). The hamster wheel goes round and round as when risk number #1 is solved risk #2 is promoted justifying the seeking more – even at the expense of what is needed. The quest isn’t eliminating this almost chromosomal more inclination. Talmudically, rather than eradicating, suppressing, eliminating this inclination, the concept is to acknowledge the Yatzer MORE putting a fence around where it can be useful rather than self destructive. That said, as Guirjieff once stated, ‘you can’t tell a prisoner to escape a prison if he doesn’t know he is in prison.’ Thus, the toughest fight/fence posting isn’t fighting the MORE-on dragon, nor slaying the MORE dragon, but embracing it and puttin’ it in its rightful – useful & fenced in place – because ‘it does make a difference’ it matters – especially relative to healing personal financial anxiety.
More scatters – ENOUGH  matters and an matter.
ENOUGH: a game changer in personalized financial life planning

(1) Personal Financial Life Planner was first coined by Mitch Anthony

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