Once again, I have the Wall Street Journal to thank for this post.
Today there was a story about “life planning”, an approach to financial planning developed by the The Kinder Institute that is based on the premise that advisors should first discover a client’s most essential goals in life before formulating a financial plan, so a client’s finances fully support those goals.
In order to discover such goals, George Kinder, the founder of the Kinder Institute, suggests that its advisers ask potential clients the following three questions:
- Imagine you have enough money to satisfy all of your needs, now and in the future. Would you change your life and, if so, how would you change it?
- This time, assume you are in your current financial situation. Your doctor tells you that you only have five to 10 years to live, but that you will feel fine up until the end. Would you change your life and, if so, how would you change it?
- Your doctor tells you that you have just one day to live. You look back at your life. What did you miss out on? Who did you not get to be? What did you fail to do?
The idea of life planning seems like a great idea, and I am going to spend some time reflecting on my answers to the three questions.
It brings back memories of a high school English class where we had just finished reading some Shakespeare play (I have no idea which one) and the teacher asked the question “Do you think people prepare themselves for dying?”
No one seemed to want to answer, so I raised my hand and said, as only a naive 17-year old can, “It seems like they do since a lot of people have life insurance.” While he was nice enough to acknowledge my answer, in the back of my mind I had the sense that’s not what he was really asking. He then went on to explain how many, if not most, people rarely think about the end of their life, or do much to really get ready for it.
I think the issue is not that people don’t want to think about the end of their life, it’s that they don’t want to think about their current life.
The WSJ article references the General Social Survey, which is conducted every few years by NORC at the University of Chicago, a research organization. In the 2012 survey, just 33% described themselves as very happy and only 27% said they were satisfied with their financial situation.
Meanwhile, 47% described their lives as routine or dull. Asked about their work, 37% said they were only moderately satisfied and another 12% said they were dissatisfied. These numbers haven’t changed much over the past four decades.
Given those kind of sobering statistics, the power of the three questions becomes more obvious.
The questions are meant to get us thinking about the here and now, not about our life 20 years from now. I think the earlier in life we are able to answer the questions, and live our life based on the answers, then the happier our end of life will be.
And while I can’t offer you any insight as to how you should answer the third question, I do suggest you consider spending your penultimate day alive reading my blog, since a day of that would seem like an eternity…Badabum-ching!