Traditional financial planners start with goals such as paying for college or funding retirement, and then tell people how to save for them. Life planners assist clients in pinpointing what they want out of life and use financial planning to help them achieve it. Writer Anne Field asked the father of life planning, George Kinder, president of Kinder and Co., based in Littleton, Mass., and Maui, Hawaii, to explain the approach.
Q: How does life planning work?
A: We begin by asking three questions: If you had all the money you needed, what would your life look like? If you had 5 to 10 years to live, what would you do with your life? If you had only 24 hours left to live, what do you think you would most regret not having accomplished? Usually it's in that last question people come out with their true goals.
Q: What goals do people have?
A: The largest number of answers tend to be related to family--wanting to spend more time with children, for example. They also cover four other areas--creative, community, environmental, and spiritual.
Q: Do clients need to make major adjustments in their lifestyle?
A: Accomplishing these goals often requires substantial changes. If the goal is to be a better parent, working 60- to 80-hour weeks may not be appropriate. So we look as much at budgeting issues as at saving and investing. Often, the result is significant downsizing--moving to a smaller home and cutting down on vacations and meals out.
Q: How do you tell if a life planner is any good?
A: No official certification exists. But the Kinder Institute of Life Planning offers training. Go to kinderinstitute.com for advisers who've taken our workshops.