Of the many benefits that financial planners can provide, perhaps one stands out more than any other. It has the distinction of being intangible, instinctive, qualitative, insightful and potentially life-changing all at once.
We are not talking here about tax management, asset allocation, insurances, estate planning, retirement or investing — although all of those services are important. We are talking about the clarity that an astute financial planner can provide.
The fact is that when many people first decide to consult a financial professional they often have little explicit comprehension of what they really want. They have material aspirations, of course. But those can just be the manifestation of something deeper.
The “having it all” myth
All of us learn through life — some of us more slowly than others — that despite what the self-help books say, we really can’t “have it all”. We accept, finally, that there are trade-offs. To succeed in one area sometimes requires sacrifices in another.
In economics, this is known as “opportunity cost”. It refers to what you are willing to give up when you choose one path over another. So you might opt to focus on saving for a home, but realise that this comes at the cost of postponing a longed-for world trip.
Each person is forever making choices about what they are willing to sacrifice in one area to gain somewhere else. A change of career may require a cut in salary, but may also offer the possibility of deeper fulfilment. Building a home extension to accommodate ageing parents may require eating into the nest egg, but also offers the joy of seeing one’s own children spend precious time with their grandparents.
We often face dilemmas between short-term material satisfaction and longer-term happiness, between a sacrifice here and greater reward there. What a financial planner provides is a sense of clarity around your goals.
Your discussion with your planner may begin with a rather prosaic analysis of your assets, liabilities, income, cashflow and spending. But it can evolve into a much deeper conversation — about what you value most, about how you rank material wealth against family and legacy, mental and physical health, and your creative expression.
In this context, money and material aspirations, while important, are revealed more as a means rather than as ends in themselves. By helping you develop and articulate what is most important to you, the planner can give you a clearer sense of possibility.
For instance, while a round-the-world trip might remain on your bucket list, you might decide you can safely delay it a few years while you renovate. In the meantime, your planner tells you that you have sufficient cashflow for shorter breaks closer to home.
You might be tired of your high-pressure job and wanting to retire, but feel your retirement balance isn’t enough to live comfortably on. In this case, your planner might suggest working past your scheduled retirement but in a more fulfilling occupation that brings you new friends, interests and a renewed sense of purpose.
Building a bridge
As objective professionals with a combination of empathy and technical know-how, expert financial planners can give you greater clarity and insight about the inevitable trade-offs that life demands. More importantly, they can show you how to build a bridge between those competing options to get you closer to your ideal life.
Ultimately, the resources we have are limited — our money, our time, our attention, our physical and mental energy. But these resources can go much further if we have a clearer sense of our purpose, our priorities and what we fundamentally value.
That clarity is what a good financial planner can bring.
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