5 Reasons You Need a Financial Plan That Have Nothing to Do With Money (EP.140)

0:28We all need to make smart decisions with our money. on social media to share a reason someone should have a solid financial plan that has nothing to do with money. Of the 40 or so responses, I captured some general themes that I'd like to share with you on this episode. As always, you can find links, resources, and a place to sign up for my newsletter at thelongterminvestor.com. Now, this first one is actually my own and certainly something I've discussed here before. And it's the idea that blueprinting your life goes beyond the budget. You see, a financial plan isn't just about numbers. It's the narrative of your life's ambitions and achievements.

1:09And a good financial plan forces you to align your financial decisions with your deepest values, turning abstract dreams into actionable goals. So imagine for a moment, your life as a grand complex novel. A financial plan is the plot outline. And it's not just about the cash. It's about crafting the narrative arc of your existence, ensuring the story flows, and setting the stage for the moments that define your life. As you're going through the financial planning process, you get to decide which experiences deserve a chapter in your story. And you also, in the process, are ensuring you have the means to bring them to life.

1:50So do you dream of sabbaticals filled with travel? or maybe launching a venture that sparks change. Maybe perhaps crafting a legacy that outlives the confines of your narratives. In essence, crafting a financial plan is akin to plotting a novel where you're both the protagonist and the author. And a real financial advisor, they can act as your ghostwriter, making sure that your story is one of intention. And the word intention is very purposeful here because this narrative of intention is rooted in the recognition that our financial decisions are among the most potent expressions of our priorities and principles.

2:32This next idea is something I kind of gleaned from a number of responses around control and empowerment, just navigating your life with confidence. Because life is unpredictable, and we have no control over markets and economic cycles. But a financial plan empowers you to make decisions that reflect your personal aspirations, not just your immediate needs. Think of a financial plan as the steering wheel of your life, giving you control to navigate through economic uncertainties with confidence. This idea, to me, it transforms your relationship with money from one of necessity and constraint to one of agency and opportunity.

3:14With the financial plan in hand, it doesn't matter what obstacles the road ahead may present because you have the ability to navigate through them. And then you can recalibrate your journey and pursue the horizons of your choosing. And to me, that makes this idea very closely related to the first one, because as you grip this steering wheel, you're not just directing your financial future, you're charting the course of your life's narrative. You're deciding what adventures to embark on, which dreams to chase, and what legacy you'll leave behind. It's a profound act of self-determination where your values, aspirations, and financial decisions converge to create life that's not just lived but truly driven.

4:00Again, life is full of surprises. Not all of them are pleasant. A financial plan is your script for handling the unexpected with grace and resilience. By anticipating potential financial shocks and incorporating flexibility into your plan, you ensure that you're not just reacting to life's surprises, but actively managing them with foresight and flexibility. The next reason that you should have a financial plan that has nothing to do with money is the way in which it can enhance your mental well-being. In a world where economic uncertainties loom large, The peace of mind afforded by a solid financial plan cannot be overstated.

4:42Something that seems to surprise people who are going through the financial planning process for the first time is how that process acts as a psychological safety net just because it's demystifying the future and transforming anxiety into action, which in turn acts as the foundational pillar for mental health. And the ripple effects are profound. They influence workplace productivity, family dynamics, and even physical health. It's just a testament to how intertwined our financial and emotional lives truly are, where clarity in one begets tranquility in the other. For so many people, financial insecurity is a significant source of stress and anxiety which can take a real toll on your mental health.

5:28The peace of mind that comes from financial planning is invaluable because it allows you to focus on enjoying life and nurturing relationships, free from the burden of financial uncertainty. The next non-financial reason that financial planning is so important is the way in which it strengthens the bonds with loved ones. Money is often considered a taboo topic, and it can become a source of contention within families. However, when approached collaboratively, financial planning becomes an act of unity. Consider the dynamics of a family or a partnership. Each member may have their unique aspirations, fears, and attitudes towards money.

6:11The process of creating a financial plan becomes a bridge across these differences, a forum for dialogue where each voice can be heard and valued. In these situations, it's about uncovering common ground, aligning on shared objectives, and collectively deciding on the best path forward. Financial planning is a shared journey that not only aligns monetary goals, but also opens up deeper dialogues about these values, these aspirations, these fears. And this process can transform financial planning from a solitary endeavor that's done in a spreadsheet into a collective enterprise, reinforcing relationships.

6:52It's really a powerful reminder that at the intersection of finance and family lies the opportunity for connection, understanding, and mutual growth. Now, another idea within this strengthening bonds with loved ones that I've heard people say is how they compare a thoughtful financial plan to a love letter to future generations. Now, in this instance, you can think of your financial plan is a love letter not written in ink, but in decisions, actions, and intentions destined for the hands of future generations. Now, this isn't merely a set of instructions on how to distribute your assets. That's really what your estate plan is.

7:32But it's more so this reflection of your values, a blueprint of your legacy, and a testament to the care and thought you've invested in the well-being of those you love. I think this sort of letter speaks volumes. It transcends the mundane transactions of daily financial management. And it's again, this narrative that tells your descendants not just where the treasure is buried, but also why you chose to bury it there. It encompasses everything from the provision of education funds, ensuring the gift of knowledge to the establishment of charitable donations, demonstrating a commitment to generosity.

8:10to the thoughtful distribution of assets, highlighting the importance of stewardship over wealth. But beyond the tangible assets, this love letter, as we're going to call it, carries with it the wisdom of financial responsibility, the importance of living within one's means, and the value of investing not just in markets, but in people and in passions. So it's really about setting an example that wealth is not measured by the zeros in one's bank account, but by the impact one makes in the world and the legacy one leaves behind. And I'll indulge just a little bit more here with my initial example because this love letter is kind of like a conversation starter that bridges spanning generations and prompts discussions about what truly matters in life.

8:57I think it also encourages future generations to ponder their own values, to question what they want their legacy to be, and how they can continue the narrative you've begun. So it's an invitation to add their own chapters to the family story, to build upon this foundation you've laid, and to make their own mark on the world. The final non-financial reason to embrace financial planning is that it values time as your greatest asset. Recognizing time as a finite resource, a financial plan helps you prioritize how you spend it, ensuring that your actions reflect your true priorities. A financial plan encourages you to invest time in what brings you joy, fulfillment, and a sense of accomplishment, rather than wasting it on pursuits that don't align with your values.

9:47This mindful approach to time management enriches your life, making every moment count. And so in this way, a financial plan transforms time from a fleeting resource into a strategic asset. Naturally, you want to maximize that strategic asset during your lifetime, but through thoughtful estate planning and charitable giving, our time on this earth can leave ripples across generations, impacting lives and shaping futures long after we've passed, which is really just a testament to the transformative power of financial planning, turning the finite into the infinite and the ephemeral into the enduring.

10:28As always, thanks for listening, and I will see you next week.

10:58This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PlanCorp and BrightPlan may maintain positions in the securities discussed in this podcast.