What would be the mindful thing to do in life? It would be to imagine your best life and then put in place the finances to support it.
The best for you, your family and friends, and your community. What would make the world a better place for you having lived? Let’s do that.
We work out our values and what is important to us. We use those values as a compass to guide us in a life of integrity and significance.
We identify our gifts and talents. These are our intangible assets. We use those assets in the service of others in accordance with God’s Will. Will power is to live a purpose-driven life.
We clearly define our favourite future, a vision that inspires us. We set our goals in Spirit; that’s where the word inspiration comes from. People aren’t inherently lazy; they just fail to set inspiring goals.
Our favourite future has a price tag. This number defines our lifetime liability forecast.
As financial architects, we must each create and maintain the financial architecture to support our favourite future.
This process we call the Game Plan; it is a life plan and a lifetime cashflow forecast to support it. It is mindful financial life planning if you prefer.
Everyone should have a Game Plan for life; as they say, the unexamined life is not worth living.
What does that financial architecture look like? Is it savings and investments?
No, it isn’t.
That’s a lie. Told by those who want you to give the liars your money so they can tap into it for fees to live their life plan.
Failure to understand this and failure to set your own financial goals is to live by the goals of others. And what’s in it for you? Not much, that’s for sure.
Mindful financial life planning advocates against financial exploitation.
The best place to find helping hands you can trust is at the end of your own arms.
You are the key to a successful Game Plan.
Let me explain.
An asset is something you own that creates a future economic benefit. It can be tangible (something you can kick or cash) or intangible (intellectual property, skills, social connections, or brand).
The best investment is yourself.
Wealth is created by investing time and energy into developing intangible assets, leveraging entrepreneurial opportunities, and creating sustainable livelihoods.
We are mindful of how best we do this: what we are good at (gifts and talents), what we love (passions), and what the world needs and will pay for. This Ikigai is the optimum strategy for creating wealth.
The best asset we can invest in is our education.
The resulting cash flow is a sequence of income, expenses, assets, liabilities, and insurance contracts (what-ifs, pooled risk contracts covering life eventualities). An asset is a future income. A liability is a future expense. This calculation is your lifetime cash flow forecast.
Expenses are our consumption. We consume to sustain a comfortable level of well-being. If we don’t have enough, we live in poverty, too much, affluence, and excess. The optimal well-being – mind, body, heart, Spirit – is in a comfortable level of well-being for ourselves, and employing excess in helping others.
Financial service products make this process simpler. But it would help if you remained mindful in their deployment. Savings and investments, for example, are vehicles for saving money you have already made. They should not be viewed as money-making vehicles, though many will have you believe that they are. There is a circumstance where investments can make you money if you start young, habitually invest over a lifetime, and allow the miracle of compound interest to be your friend. But this is a lifetime of discipline, and few people fit that profile.
When you consider the snouts in the investment trough, you realise you are left with breadcrumbs. You take all the risk, but fees, taxes and inflation consume the lion’s share of profits. They are helpful as vehicles to preserve wealth but should not be viewed as anything more than that.
Remember, investments are a third of financial assets; financial assets are 15% of tangible assets for the average Brit (excludes business assets, ONS survey). Your market-to-book ratio is like that of a technology company; tangible assets are only 2% of your market value. And wealth in your bank account is a fraction of wealth in mind, body, heart and Spirit.
Conventional financial planning as you thought you knew it (financial advice with a view to intermediation with a regulated investment provider) is but a dot on a mindful financial life plan. It pales in insignificance, and it matters not whether the dot is managed on a direct-to-consumer investment platform or by a reassuringly expensive adviser.
But remember this.
The best outcomes are achieved when you are in control, you own placement of your own finances, you set your own goals, you run your own money, and you invest in yourself.
Empowerment, democratisation, decentralisation – that’s the way of mindful financial life planners.
Academy of Life Planning 