Why your financial plan should not be only about money

Do you know what you want in life? I’m not asking this in the profound “Who am I?” sort of way, like Jiddu Krishnamurthy would have posed. Mine is a comparatively straight forward question - but still a question which you need to ponder a bit before answering.

As financial planners, we ask our clients to let us know what their goals are. Invariably we get the usual suspects like children’s education, retirement funding, holiday, property etc. Nothing wrong with that, of course, but curiously, we find cases where people want lots of properties or an enormous amount of money, before they retire. We keep wondering why they require so many properties or so much money in retirement.

**Shooting in the dark:**When we ask, most do not have any cogent answer to that. They just say that they want to be really secure. But, how much money can make one feel really secure? I think you will agree that even that is a moving target. So, today, if Rs 5 crore looks like a good sum of money to retire on, it will look insufficient five years down the line. Hence, one will be constantly chasing a mirage and will keep working towards an ever moving target. Also, many times there is no basis for the huge sums they want. Even though they have modest expenses, they still want incomes many times what they need. It is a conjured up figure which has no basis.
In these situations, planning done on the basis of such goals are neither going to be realistic nor is it going to bring happiness, meaning, peace of mind and a sense of closure - for the goals themselves will keep changing, overtime!

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That brings us to the fundamental question again - What do we really want in life? If we want to live a life free of worries, firstwe need to answerthis question. Without knowing where we want to go, we cannot lay a path to go there, can we? We cannot connect with conjured up goals and hence we may not stick with them. That means the financial planning exercise, based on these goals, would be a waste of time.

[caption id=“attachment_79008” align=“alignleft” width=“380”]  Do you know what you want in life? Reuters[/caption]

**Passion & meaning in our lives:**Why not take some time to think about what we really want to do in life? What is that we are passionate about? Are we pursuing that? What is meaningful for us in our lives? Are we aware of that and have we included that yet in our lives? Life without passion and meaning is hollow. Most have not thought about these things at all. That does not mean that we do not have something we are passionate about or something that will add meaning to our lives itself.
Most people I have talked to have something they have a passion for - be it music, nature, biking, travelling etc. For most people, such passions have got masked by a thick layer of the mundane, existential chores & issues, that, they need to think a bit when asked about their passions.

Passions are those things which consume us, which we do not see as a job to be done, something which we can do for hours on end & are very happy doing without tiring. These passions are the things which make our life worth living. It is these passions that add spice to our lives.

The other is meaning in our lives. Filling the 24 hours with tasks and doing it all the year round, makes us tired and haggard. However, if those same tasks are infused with meaning, these very tasks energise us. For instance, for a parent, seeing their child blossom into a responsible and successful citizen is a goal. For them, even mundane tasks which they need to do, which will further them towards that goal, adds meaning to their lives.

Even comparatively simple things like feeding the dogs in the street would be meaningful to some people. For some others, lessening to the sufferings of those inflicted by disease would add meaning to their lives. Mother Teresa found this meaningful and what a life she led! What will be meaningful to each of us will vary. We need to find that secret sauce.

What will bring happiness: Normally, when we pursue our passions and lead meaningful lives, it results in happiness. But happiness would also result from “stopping by to smell the roses”. The journey itself needs to be enjoyable, not just the end. In fact, the life path should be such that every day is filled with promises of small pleasures and surprises.

Seeing a movie, attending a concert, going out to meet a friend, playing with the children are all small activities which can bring out happiness in our lives. These are life’s small pleasures, which make life worth living. We need to give time to these while going through life.

The Life Plan: A financial plan essentially looks at where we are, where we want to go and how to get there.

It is easy to understand “Where we are”. The difficult part is “where we want to go”, which is what we were discussing. Once we have understood what we are passionate about, what is meaningful for us and what brings happiness, the goals will spring out of that understanding. These are the real meaningful goals to plan for. Only then, the plan that comes out would make sense. A plan created with this understanding is unlikely to go astray - for it has taken into account the heart’s core.

Uncovering the real life goals and then planning for it is what a Life Plan is all about. Getting the first part right, is critical here. Today, there are different life planning approaches through which planners will be able to assist their clients to delve deep inside themselves and come up with goals/actions that have meaning to them, they are passionate about & will make them happy.

Planning for such goals improves the quality of their lives. Running after more and more money or assets would no longer have any meaning. Nor would getting the best returns excite them. The financial plan would in any case cover the basics they require out of life.

Life would now be worth living. Smelling the roses along the way would now be second nature!

The author is founder, Ladder7 Financial Advisories. He is a Mumbai-based certified financial planner.