By Tony Batman, chairman and CEO, 1st Global
When most people think of financial planning, they think in terms of dollars and cents. They think of their weekly or monthly paycheck, and work with a financial advisor or tax professional to set long-term goals for retirement or education planning, creating a yellow-pad list of financial “to-dos.”
I believe that’s a limited definition that does not translate the full power one can derive from a comprehensive financial plan. It lacks an outline for implementation and often results in a perpetual state of procrastination — “I’ll get a handle on my finances once I get past this tough patch.”
To me, personal financial planning is the process of preparing for the inevitable tragedies of life that will affect each of us both financially and emotionally. It is a philosophy for intentional living, a framework for creating happiness, and offers joy in the face of life’s natural tendencies toward chaos and entropy.
A fully implemented, complete financial plan frees people to focus all of their mental, physical and spiritual energy toward their highest goals and survive life’s toughest obstacles.
Financial Planning is a Philosophy for Living
There are many axioms and premises inherent in the statement, “Financial planning is a philosophy for living.” Here are a few:
Making Promises to the Ones We Love
The essence of happiness is captured by the positive feelings of joy, significance, meaning, dignity, certainty, security and confidence. Happiness is a desirable, sustainable and favorable state of being.
For many, financial planning is a path to happiness because it allows us to make and honor life’s important promises and obligations. These promises are the duty of being a husband or wife, a father or mother, a brother or sister, and even an employee.
Think of the important promise a husband makes to his wife that she will retire with dignity whether or not he is there to provide for her. Another is a promise to our children or grandchildren that they will have financial assistance with obtaining a college education, whether or not the parents or grandparents are living and present in their lives at that time.
Life’s Tragedies Befall Us All
Two kinds of tragedies cause emotional and financial trauma: “That’s life” tragedies and “failure to prepare” tragedies.
The French often use the phrase “c’est la vie” to refer to instances that can only be described as “that’s life.” “That’s life” tragedies are those forgivable events such as a sudden major illness, the loss of a job, the death of a spouse, a divorce or the stress of remarriage. Even retirement can be viewed as a forgivable tragedy because it occurs due to the fault of no one. That’s just life.
Much worse are type-two tragedies, which are the result of being unprepared for those “that’s life” events. This is an unforgivable tragedy because it means you were unprepared for life’s inevitability. We all grow older. We are all susceptible to losing our jobs.
It is sad that many of us carry the audacity and arrogance that serves as a false cloak of invincibility to “that’s life” tragedies. It is utter foolishness to believe that a major illness, the loss of a job or the death of a spouse would not cause severe emotional and financial trauma. Too much of this foolishness resides in America today. Nearly 1.3 million Americans die from heart disease, cancer or stroke each year. If it doesn’t happen to you, it can certainly happen to someone you know or care deeply about.
The only way to inoculate your life from the foolishness of being unprepared is to develop and implement a financial plan that accounts for these tragedies.
Battling Life’s Chaos
Love is the energy we use to battle back this chaos. When you observe a prosperous and happy nation, a growing business, a functioning family, or a life of joy, significance and meaning, you can be assured that love has been exerted very forcefully against the laws of chaos and entropy.
Unfortunately, the idea of “love” has been watered down by Western culture and the pursuit of materialistic happiness.
Love is much more than a desire that can be captured on a Hallmark card or illustrated with grand gestures such as expensive gifts or tropical getaways. Love is an action verb; a conscious vow to whom or what one’s energy will be intentionally directed; a conscious devotion to improve one’s self for the betterment of another without regard to personal cost.
In a chaotic world, love generates the spiritual energy to create and commit to a financial plan when tragedies occur. When chaos disrupts, financial planning provides the antidote that allows us to honor the important promises we make to ourselves and others.
Who Carries the Torch?
Last month I challenged you to rediscover the “why” of your business. Now that you know “why,” it’s time to take action.
The financial planning profession can be the great torchbearer that guides us toward a culture of personal responsibility. To achieve this, financial planners and wealth managers must believe in the monumental value they deliver to clients. They must eliminate any personal hypocrisy, stop their own tendencies toward procrastination, take this craft seriously for themselves and implement every aspect of their own personal financial plan in order to unify their walk and talk of life as quickly as possible.
My hope is that financial planners boldly engage themselves to make people’s lives better, happier and more liberated.
I am ready to carry the torch. Are you?
1st Global Capital Corp. is a member of FINRA and SIPC and is headquartered at 8150 N. Central Expressway, Suite 500 in Dallas, Texas 75206; (214) 265-1201. Additional information about 1st Global is available via the Internet at www.1stGlobal.com.
1st Global was founded by CPAs on the belief that accounting, tax and estate planning firms are uniquely qualified to provide comprehensive wealth management services to their clients. Each affiliated firm is provided with education, technology, business-building framework and client solutions that make these firms leaders in their professions through dedicated professional client relationships built around wealth management.