What is important to you about your retirement or your financial future? To this question, most of my clients formulate a response somewhat related to money, be it that the person wants to have enough money to retire, enough money to leave for their kids, or enough money to leave a legacy for a charitable cause. Is “money” what they really want? When I dig a bit deeper, and begin questioning what it is about money that makes it so important to them, in most cases, they realize that it is not so much money they want, but the intangibles that they believe money can bring. One of these intangibles is peace of mind, namely, knowing that they can live to be very old without any financial stress, with the ability to travel and otherwise spend as they please, and knowing that their family will be taken care of if they were to get sick or pass away. This response is consistent with my belief that we are more than our net worth: we are our family, our lifestyle, our legacy, our community; we are our cares and our concerns.
When you meet with a financial advisor/planner, you intend to meet an expert in their field of practice. But you, too, are an expert—an expert about yourself and what you want. At first, it may not be evident to you; with the right conversations, a qualified financial advisor/planner should be able to create a space for you to discover and articulate the possibilities you seek, and what you want to achieve. What does this mean? Well, it means that your financial advisor/planner will be looking to you to find out more about your situation and what you want to create, and above all, they will want to find out what is important to you. It is only once that conversation has occurred that they can help you build a plan that helps you achieve these things that are most important to you. Begin with the end in mind: It is important to have a discussion about your values before beginning any plan, because once you have determined your values, it will be much easier to make the financial decisions that align with who you are, and what you want to achieve. Sometimes, those decisions are not the most tax-efficient, or even the most profitable from a pure numbers perspective; but they may still be the best decisions for you, on the basis of other intangibles. The financial advisor/planner you are working with should not bring their personal bias into the equation, and push you to make a decision that, while financially optimal, is not aligned with your values. Their role is to present you with all the options available, and guide you towards the best outcome for you by setting out the advantages and disadvantages of each option, so you can make the decision that is best for you.
A metaphor I often use with clients is as follows: We have all the materials and tools to build their financial home. The main objective is to make sure you have four walls and a roof over your head, but wouldn’t it be even better if we created something that takes into account who you are and what you desire? For example, if you play board games with your family every night, you may want to consider a big living room; if you enjoy cooking 4-course meals, you may want a fully decked kitchen; if you love to swim, you may want a pool; if you are environmentally conscious, you may want a more efficient home built using green materials. If you know the things that are important to you, then we can take steps to make sure your financial home reflects your cares and your concerns. Or where you have competing concerns, say, between saving enough for a comfortable retirement and taking care of an aging parent, then at that point we have two very important things that you will need to make a decision about. In this case, it may mean creating a trust or allocating funds specifically for taking care of that parent, while scaling back on your retirement in a deliberate way. Having a conversation about what is truly valuable and desirable to you will assist greatly with making this type of difficult decision.
In addition to being helpful in making financial decisions, knowing your values will also assist greatly with making decisions beyond the financial domain. For example, if you have a child with a disability and you want to make sure they have the best life possible, a financial decision you may want to consider is to contribute to a RDSP or to allocate assets to a Henson trust. However, you and your financial advisor/planner may want to also start building support networks around your child, for the comfort of knowing there is a community around them that can support them beyond financial necessities. This social and family support is just as important as taking care of your child financially. These are all things that you may have missed if the financial plan is done in a vacuum without consideration for what you really want to achieve and what is truly important to you.
We live busy lives, and many of us make financial decisions by reacting to events rather than by deliberately acting on a financial plan that represents what is most important to them. So how do you find your values? Start by asking what is important to you about your financial future and retirement etc. Then, ask why that is important; and, like a pesky child, ask this “why” question several times, until you have established what is the highest value in your hierarchy of what is important. And lastly, take note of your answers, whether that is spending time with family, vacationing, continuing working, volunteering, or leaving a legacy. Include them in your plan, and review them as you build it to make sure the plan reflects your values.
