I got hooked onto Lee Eisenberg’s new book, “The Number” (Simon & Schuster, 2006), via Elaine Morgillo, a certified financial planner and president of New England-based Morgillo Financial Management.
She says that the longer she practices financial planning, the more she realizes the importance of learning the “core values and non-financial goals” of her clients. Catch that last item? Non-financial goals.
As a result, she now adjusts her focus on the initial client interviews from a straight question-and-answer scenario that centers around assets, liabilities, income, and expenses to an understanding of exactly how that client wants to live … whether present or in the future.
Backed by imaginative and visionary advice, Eisenberg’s book urges people to assume control and responsibility for their standard of living, and to sufficiently enable their “enduring aspirations” for years to come. In effect, it shows people the way to evaluate their money traits and to concentrate on their values and aspirations so that they can really determine how much money they will need.
Looking at this strictly from a personal standpoint, I know when my wife and I first sat in our own financial planner’s office (Stuart Kessler, managing director of RSM McGladrey and the former chair of the AICPA—we refer to him as the “other” Stuart), my wife was surprised to hear my answer when he asked me what I wanted to do upon retirement. “Retire? What retire? I don’t know that word. It’s not in my lexicon. I can change life style but retire? I’m not sitting around watching soaps all day. Whoa, baby!”
My wife was under the impression that we would both walk down that “retirement” path hand-in-hand. After all, wasn’t that why we were seeing a financial planner? It wasn’t happening because even though she talked about it a lot, and assumed I was right there with her, the other Stuart actually uncovered not only the fact that I wasn’t prepared to do so but also neither was she.
This, as Morgillo, points out quite correctly, is what people do not realize. Many financial planners will concentrate solely on the financial aspects, making sure that the client’s money will outlive the client. This was certainly the case with my wife and me. As that other Stuart pointed out, we didn’t have to work but rather it was something we both wanted to do.
Accordingly, Morgillo says that over the past several years, she has seen a growing number of financial planners include life planning as part of the comprehensive planning process. This, she notes, is to “educate clients about the multitude of issues that surround their relationship with money.”
As Eisenberg so aptly writes, “A financial plan without a meaning plan leads straight to the thudding realization that -- duh -- all the money in the world doesn't buy happiness.”
Think about it. Time Magazine this year has said, “Planning isn’t only about finances. It’s also about your search for meaning.” And Money Magazine has added, “Life after work can be sweet -- if you know why you’re retiring.”
Morgillo sums it up with this observation: “Retirement planning isn’t just about plugging numbers into a spreadsheet. Your money should be a tool to help you manage your life, not the other way around.”
