What We Want for You in 2020
Have you ever heard someone say, “yeah, well – as soon as you get the financial plan, it’s out of date, so why bother?” We have. More times than we can count (although, interestingly, we hear it from other financial professionals more often than from clients).
It’s true, you know. If the primary purpose of a financial plan is to take the numbers you have, apply growth or depreciation or inflation to them, and project them into the future, then those projections are – at best – stale or downright wrong within a day or so.
But is that actually the primary purpose of a financial plan?
We think not.
Now, don’t get us wrong: we care about accuracy just as much as any other highly trained, competent professionals. But cash flow and financial planning are about so much more than math, as we’ve said many times before¹. Our work with clients is designed to help them not only see what the future might hold if they do X instead of Y, but to help them articulate what’s important to them, and use those values to guide their decision-making.
From our perspective, that decision-making guidance is the whole point of planning. As in: we use the projections to help you decide what to do, and so you have something to refer back to when you wonder how you’re doing against how we thought you’d be doing. We don’t use them or expect you to use them to perfectly predict what will happen next. (Oh man! If we could do that, we’d have a whole different business model on our hands!)
This decision-making role is why we work so well with accountants, lawyers, and other members of professional advisory teams. We’re not tax experts, legal experts, or any other specific kind of experts; accountants are tax experts, lawyers are legal experts, et cetera. Our role as cash flow and financial planners is knowing as much as we need to and to consult intelligently with the experts, so that we can do what we do best: put all of the various areas of expertise into the right relationship with each other and with your personal definition of success, so that you can decide what to do next.
Last year, what we wanted for you was permission to design your life, and we spent the entire year applying the concept of Design Thinking, an iterative, you-centred process for making complex decisions. This year, we want to give you practical examples of this kind of decision-making from real life clients², in the hopes that seeing how other people have made decisions in alignment with their unique circumstances and values will help you do the same.
What we want for you in 2020 is to deepen your understanding of planning as the application of practical action and decision-making to the philosophy of your life. We will illustrate this ‘planning in action’ with stories of real people we’ve helped to bring their financial lives in line with their values.
In the series of case studies we will write this year, we’ll be zeroing in on one of the specific questions which the real-life client was asking, and illustrate how we ended up answering those questions for them, given their own life philosophies. We’ve chosen cases from across the client spectrum here at Spring: from an older couple experiencing a different retirement outcome than was expected, to a newly single, self-employed mom of two teenagers managing new cash flow circumstances, to a middle-aged couple with a disabled son, to a daughter planning to help her aging parents through retirement.
We expect that you’ll find something of yourself reflected in this series, even if the specific situations sound completely different from your own, and we are excited for you to join us as we revisit some of our favourite clients together.
We caution you to remember that every single person and every single family is unique – no matter how much they may seem to share with you or someone you know. The advice that ends up in one planning strategy is rarely an exact match for the advice that ends up in another. The tiny little details of your specific situation can require a small tweak that ends up making a big difference. Planning is often like pulling threads in a sweater – one small movement and the entire sleeve can unravel³.
Another key to remember is that the way you learn and receive information will be as personalized as your thumbprint. Some of our clients benefit from endless information, analyses, and potentials. Others are entirely overwhelmed by this and need their advisory team to “cut to the chase.” Some benefit greatly from talking through ideas, while others need a few days or weeks to read and contemplate, then come back and discuss and regroup. Some want their information in pictures and drawings, some in written words, some in numbers, and … the options are truly endless.
As planners, we do our best to understand your learning style, and our own teaching style. We consider how to give you the most and best information in the format(s) that make it possible for you to really integrate it with your life, and your definition of success.
At the same time, we want to leave doors open to possibility. Life will necessarily change as you change, and as the world around you changes. This is why some may find the numbers in a financial plan to be stale as soon as it is written – changes have already occurred.
But a plan isn’t about concrete answers in numerical form. A plan is simply a guiding light, using all the things we know now, to take direction. Since What We Know Now will alter and be tweaked throughout your life, so too will your plan.
A plan clearly identifies where you are right now, and even more importantly: your own philosophy. Your philosophy defines what is important and valuable to you. It defines what you consider “success” in your own life. It defines what you find meaningful, powerful, and motivating. It defines how you find joy, what you consider painful, and what trade-offs you are willing to make in your life to attain or avoid either of these.
Your philosophy makes it clear to your planner what is possible and what is not, what is vital and what is nice-to-have, and how you want to get to the places you want to go in your life. From there, your planner can help you develop the strategies that work for you, and tweak them as your life and the world around you change.
We hope you are looking forward to this year’s theme as much as we are. We know that the way we approach planning differs from what most Canadians have experienced, and we’re excited to have found a way to share that approach with you.
¹ Most recently on this episode of the Moneysaver podcast, at minute 33.
² Of course, we’re going to give them delightfully fabulous fake names and identifying details that will both delight us and keep their lives private.
³ Did you know that “unravel” and “ravel” have the same definition? This isn’t a useful planning footnote, but English is weird.