Life planning is a holistic approach that takes into account all individual and family goals to design a long-term financial plan. In the past, investment and financial advisors tended to focus narrowly on numbers, such as budgets, taxes, insurance, and investments, without looking at the overall needs and objectives that the money needed to meet.

Incorporating life goals together with financial goals leads to an integrated plan and can help you stay on track towards investment goals. An investment advisor looks only at your risk tolerance and the type of portfolio you are trying to develop, but a financial life planner can help you put your investment strategy into perspective within other aspects of your life.

As part of holistic life planning, your adviser may coordinate with your lawyer, banker, and other finance professionals to give you the widest area of expertise on tax considerations, charitable donations, estate and retirement planning, college savings, and any other life events you want to plan for.

The Role of Investments

To help clients formulate an investment strategy, life planners employ three central questions. The answers to these vary for every person and can play an important impact on how you’ll want to channel your future investments.

Question 1: Picture yourself as financially secure in your present life and know that you have plenty of money for your future needs. How would you live your life from this point? How would you choose to spend your money? Would you change anything about your daily routine?

Question 2: Your doctor tells you that you have between five and ten years left to live. You’ll get no notice of when the end is coming, but you won’t feel sick and can enjoy your remaining time to the fullest. What will you do with the time you have left? What parts of your life will you want to change, and what steps will you take to make those changes happen?

Question 3: This time instead of years you find you have only one day left to live. What do you feel like you’ve left undone – things you wanted to pursue, places you wanted to visit, things you planned to accomplish? What do you wish you had done and what do you feel like you missed out on?

Honestly working through these questions can help you dig deep and define your core values and what you hope to get out of life. This goes far deeper than just money matters, though obviously you’ll still need to save and invest to make change happen and to accomplish some of the many things you’ve always wanted to do.

Your investment portfolio is an important part of life planning, but it is not the only factor. Instead, your personal and family goals and the future decisions you foresee making provide a context for all your present and future investment decisions.

Taking further action

The life planning approach was developed by Harvard economist-turned-financial adviser George Kinder. His 1999 book Seven Stages of Modern Maturity was written for other financial advisers who wanted to incorporate a discussion of personal goals into their financial planning sessions.

If you are interested in leaning more about incorporating investments into your life plan, or want to work with a holistic financial adviser, Kinder has since founded the Kinder Institute of Life Planning. His website offers a listing of Registered Life Planners trained in his methods.

Or you could work through the questions above and use the answers to start a conversation with your current adviser. The ultimate goal is to make sure that your investment strategy matches what’s really important to the needs, hopes, and plans of yourself and your family.

For more information on the life planning services we provide at Expert Wealth Management, get in touch today. 

Call 01993 772 467 or contact us online.