The Three Questions: Part I
by Gerald Townsend, Financial Editor

Financial planning is a process of establishing goals and then applying your resources towards accomplishing those goals. Your resources are not just the size of your investment portfolio, but also your time, talent and income earning potential.

There are many financial professionals eager to help you navigate through the maze of tax regulations, investment alternatives, insurance policies, and complex laws that confuse and confound us all. However, it all starts with your individual, personal goals.

What, exactly, are you trying to accomplish? Can you even express your goals? What is your “worldview,” which is the lens through which you understand and interpret what you see and experience? Do you have a mission, or purpose in your life that you can articulate? These are penetrating questions and many financial planners are uncomfortable probing this deeply with their clients. In addition, planners well-trained in the quantitative areas of finance may feel inadequate to deal with qualitative issues.

Often, when someone is asked what their goals are, they reply with a standard answer, such as “retiring comfortably,” or “providing for my family,” or “achieving financial independence.” Now, there’s nothing wrong with those goals, but are those really what your most heart-felt desires are, or are you just responding with the traditional answers that you read about in a magazine? It has never been an easy task to “know thyself,” and with today’s frenzied pace, 24/7 connectivity, and mind-numbing entertainment it is certainly getting more difficult.

There are some planners who try to help their clients open the window to their core desires and beliefs and then – and only then – assist them in marshalling their resources towards these real goals. The name “financial life planning” has been given to this approach, in recognition of its reach beyond finances to a person’s entire life.

George Kinder, a pioneer financial advisor and one of the key proponents of financial life planning developed three key questions as part of the process of helping a client really drill down to their foundational truths.

This month, I am providing you only with Kinder’s first question. In subsequent months, I’ll give you questions two and three. There is a reason for this approach. I want you to answer each of these questions, in sequence, without having all three in advance. I want you to think deeply about each individual question. If you are married, have your spouse answer each question without knowing how you answered it. Don’t just answer the question in your head, write it down. Ok, those are the rules – now here is the first question:

Imagine that you are financially secure and have enough money to take care of your needs, now and in the future. How would you live your life? What would you do with the money or with your time? Would you change anything? Let yourself go and don’t hold back on your dreams as you describe a life that is complete and richly yours.

Don’t worry about sounding silly or impractical as you answer question one. There’s plenty of time to get serious later.

Gerald A. Townsend, CPA/PFS, CFP®, CFA® is president of Townsend Asset Managment Corp., a registered investment advisory firm. Email: Gerald@AssetMgr.com.